- October 1954 (?) – W. T. Sheals (GE Legal Counsel) to JSA
Statutes of Real Estate of the Nature Conservancy under the Exemptions Provisions of the New York Statute…
Organization and Purposes of the Nature Conservancy –
The Nature Conservancy was organized in 1951 under the provisions of Title 29, Chapter 6 of the District of Columbia Code (1941) as “a non-profit corporation for educational and scientific purposes. “The scope of the corporation’s activities are set forth in its charter as follows:
The particular business and objects of said corporation shall be a) to preserve or aid in the preservation of all types of wild nature including natural areas, features, objects, flora and fauna, and biotic communities; b) to establish nature reserves or other protected areas to be used for scientific purposes; c) to promote the conservation and proper use of our natural resources; d) to engage in or promote the study of plant and animal communities and of other phases of ecology, natural history, and conservation; and e) to promote education in the fields of nature preservation and conservation.
The objectives of the Nature Conservancy are further defined in Article II of its Constitution as follows;
Objectives. The preservation of biotic communities and other natural features is essential for many types of scientific research; for education in biology; to check areas for comparison with agricultural, grazing, forestry and engineering practices; and for the esthetic enjoyment of wild plants and animals and of the primitive landscape. The objectives of the Nature Conservancy shall be, therefore, the preservation under proper safeguards, of adequate samples of all biotic communities and other natural features in each distinctive natural region and the encouragement of the study of these communities. These objectives are to be attained through work of permanent committees. The organization of the Nature Conservancy shall be designed to give these committees the greatest possible freedom of action.
The acquisition by the Nature Conservancy of Dome Island in Lake George is contemplated. The island will be preserved as a “natural area” and held solely for that purpose.
Exemption Provision of New York Property Tax Law.
Section 4 of the New York Tax Law reads in part as follows:
“The following property shall be exempt from taxation:
***6. The real property of a corporation or association organized exclusively for the moral and mental improvement of men and women, or for religious, bible tract, charitable, benevolent, missionary, hospital, infirmary, educational, public play ground, scientific, literacy, bar association, patriotic, historical or cemetery purposes, for the enforcement of laws relating to children or animals, or for two or more of such purposes, and used exclusively for carrying out thereupon one of more of such purposes, either by the owning corporation of by another such corporation as hereinafter provided.”
Application of New York Tax Law to the Nature Conservancy
The best criterion of a corporation’s nature and purpose obviously is its charter and constitution which define and limit the scope of its activities. The Nature Conservancy, as indicated above, by the terms of its charter, was organized as a non profit corporation for educational and scientific purposes (emphasis supplied). The nature of the activities and operations of this organization, further expressed in its constitution and its actual activities are consistent therewith.
The term “educational” used in the exemptions provisions of the New York Statute is not limited to schools or colleges with classroom activities, nor has the term “scientific” as used therein been limited to institutions of a formal nature with laboratories or similar research operations. (People exact Johnson O’Connor Research Foundation v. Tax Commissioners, 96 N.Y.S. 2 D. 36.
The purpose and objectives of an organization such as “The Nature Conservancy” are essentially the same as those of an organization operating a public art gallery. The latter organizations acquired exhibits and preserves works of art, of sculpture and paintings, etc. for the enjoyment and education of the public. The Nature Conservancy acquires, holds, and preserves certain works of art of Nature for the enjoyment and education of the public and in addition promotes scientific study of plant and animal communities. Public art galleries are beyond question entitled to exemptions under the provision of the New York Tax Laws, quoted above. As recently as 1951, the Frick Collection, a public art gallery was involved in a suit in this section, in the 196 misc. 1026, affirmed 276 A,D. 891. While the question of the exempt status of the Frick Collection was not directly an issue, its right to exemption was evidently conceded and the question before the court was whether property of an educational corporation held solely for investment purposes was exempt from tax. Obviously the City of New York had no doubt that a public art gallery is an “educational” corporation within the meaning of that term as used in the New York statute and it is equally clear that an organization, such as The Nature Conservancy, is within the scope of the exemption provisions of the statute.
In further support of the conclusion reached herein that the Nature Conservancy is an educational and scientific Corporation are rulings of the Commissioner of Internal Revenue with respect to the status of such organizations, dated February 5, 1952, and March 25, 1954 on the first ruling the Commissioner holds the Nature Conservancy exempt from federal income tax under the provisions of section 101(6) f the Internal Revenue Code. This provision exempts, among others, educational and scientific organizations, and these are the only classifications thereof which would apply to the Nature Conservancy. The fact that the Commissioners ruling is based on the theory is borne out by his second ruling of March 25, 1954, addressed to that organization, and holding that the Eastern New York Chapter of the Nature conservancy is exempt under the provisions of section 101(6) of the Internal Revenue Code “as it is shown that “[?] and such chapter are organized and operated exclusively for educational and scientific purposes. (emphasis supplied) The Eastern New York Chapter is an integral part of the Nature Conservancy and is governed by the latter’s chapter.
It is my conclusion that Dome Island, if owned by the Nature Conservancy and held as a Natural Area within the provisions of that organization’s charter would be entitled to exemption from property taxes pursuant to the provisions of Section 4 of the New York Tax Law.
- T. Sheals
Former Tax Counsel
General Electric Company