Heated testimony as committee considers bill letting municipalities require PILOT payments from nonprofits

The committee heard extensive testimony Feb. 4 on House Bill 625, which would create a statutory framework allowing municipalities to require payments in lieu of taxes (PILOTs) from otherwise tax-exempt nonprofit organizations equal to 25% of the municipal portion of the assessed property tax, with exceptions and negotiation allowed by local ordinance.

Representative William Bolton, the bill’s sponsor and a former select-board member from Plymouth, said the bill was drafted after local officials in Plymouth asked for a tool to address municipalities where a large share of property is tax-exempt. "Regardless, all the residents, all the businesses, all the non profits receive every benefit that is provided by the town of Plymouth and is funded by the Town Of Plymouth taxpayers," Bolton told the committee, describing local fiscal strain caused when more than half of a town’s full-value property is exempt.

Nonprofit providers urged the committee to reject the bill or proceed cautiously. Tom Blonsky of Catholic Charities New Hampshire said the organization provides substantial uncompensated services across the state and warned that imposing PILOTs would force service reductions, fee increases or relocation. "To tax us on top of what we already generously contribute to the many communities in which we're an integral part would force us to either cut services in particular towns or begin to charge or to raise fees," Blonsky said.

Other witnesses reiterated that small nonprofits often operate on narrow margins and would struggle to absorb new property tax bills. Kathleen Reardon, CEO of the New Hampshire Center for Nonprofits, said about 70% of state nonprofits have revenues under $100,000 and warned a new tax would be "devastating" for many providers. Ben Saul of Visions for Creative Housing Solutions and representatives of Mayhew, the YMCA, the Front Door Agency and New Hampshire’s hospitals described likely service reductions and economic consequences if PILOTs were imposed broadly.

The New Hampshire Municipal Association and several municipal witnesses supported HB 625 as a local-option statutory vehicle to allow town governing bodies and voters to negotiate payments or pilots where municipal officials judge them appropriate. Brody Deshaies of the Municipal Association said the bill preserves municipalities’ ability to adopt ordinances and still exempt organizations in whole or by negotiated arrangement; he recommended clarifying that the new statute not override existing RSA 72:23‑n, which allows voluntary payments in lieu of taxes.

Committee members asked about statutory interaction with RSA 72:23‑n, how “similar mission” would be evaluated, and whether PILOTs would be applied to municipal-only rates (the sponsor confirmed the bill applies to the municipal portion of the tax, not the education or county portions). There was substantial public comment opposing the bill; the clerk reported 22 remote supporters and 534 opposed online, and the in-room blue sheet showed three in favor and eight opposed.

No committee vote was taken at the public hearing.