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Bill would clarify nonprofit status for childcare property tax exemption and extend school building aid eligibility to preschool space
Summary
Senate Bill 275 seeks to clarify that nonprofit child-care centers recognized as 501(c)(3) and registered in good standing qualify for charitable property-tax exemption; the bill also amends school building-aid language to include preschool space so districts can qualify that square footage for school building grants.
Senate Bill 275, introduced by Sen. David Waters, would clarify when a child-care center qualifies as a charitable entity for property-tax exemption purposes and would expand school building-aid eligibility to include preschool classroom square footage.
Waters said the amendment narrows the bill’s focus to address inconsistent assessor rulings about whether nonprofit child-care centers qualify for the charitable exemption. The amendment ties the definition of “charitable” in the property-tax statute to the language in RSA 72:23-l and requires that an entity be recognized by the Internal Revenue Service as a 501(c)(3) and be a registered charitable organization in good standing with the state. “This is the language the Center for Nonprofits and others thought would work to provide the clarification,” Waters said.
Why it matters: Witnesses described practical consequences for local assessors, child-care providers and school districts. Jim Michaud, chief assessor for the town of Hudson, testified on technical and legal limits to tax exemptions and urged clarity about how courts apply the four-part educational-exemption test in case law. He said the bill’s amendment likely addresses some concerns but urged guidance that municipalities and providers can rely on when assessing educational exemptions.
The bill also revises school building aid language to permit school districts to include preschool square footage in applications for renovation or new construction assistance. Waters said that change would allow districts that establish early-childhood centers to have that space considered for school building aid in the same way as K–12 classrooms.
Public testimony was mixed. A municipal assessor and nonprofit representatives supported the clarification language in the amendment; one resident opposing the bill argued that expanding exemptions could shift tax burdens to homeowners. Michelle Merritt, president and CEO of New Futures, testified that New Futures worked with the sponsor and the New Hampshire Center for Nonprofits on the amendment and supports the clarification for nonprofit child-care centers.
Committee action: The committee held public testimony and closed the hearing; no final committee vote on the bill is recorded in the transcript provided.
Next steps: The bill’s text ties charitable-status qualification to RSA 72:23-l and IRS recognition as a 501(c)(3); municipal assessors and school officials may seek guidance or administrative guidance to reconcile case law and practice during implementation if the bill advances.
