Ways and Means OKs amendment letting parsonage rental income offset pastor housing allowance; 15-1

The Ways and Means Committee on Monday adopted an amendment to House Bill 291 that would allow churches to apply net income from renting a parsonage to a pastor’s housing allowance. The committee voted 15-1 to approve the amendment and then voted 15-1 on the bill as amended; the measure was placed on the consent calendar.

The amendment (identified in committee as 2025-1925h) replaces sections 1 and 2 of the bill and narrows the proposal to permit a church that rents a parsonage or similar clergy residence to apply the property’s net rental income — after expenses such as repairs and insurance — to a pastor’s housing allowance. The bill’s implementation date in section 3 remains in place (committee discussion referenced July 1, 2025, as the implementation date). The amendment was moved and seconded in committee and carried by roll call.

Supporters told the committee the amendment is a simplification intended to address a specific practical concern: some clergy now live in homes they own and pay real estate tax, while churches continue to own and operate parsonages. Under current law, a parsonage occupied by a pastor is generally exempt from real estate tax; the amendment would allow churches that rent a parsonage to apply net rental proceeds to the pastor’s housing allowance in computing the tax treatment described in the bill.

Several committee members said the narrower amendment moves the issue forward while leaving broader regulatory questions for later legislation. One lawmaker who identified themselves as the bill sponsor noted the change was meant “to get to the heart of what the immediate concern” is and described the amendment as a simplification of earlier, broader proposals.

Opponents and cautious members raised questions about scope and oversight. Some committee members asked whether the bill’s language could unintentionally exclude non-Christian faith traditions and whether the statutory term used for churches already encompasses other places of worship. Committee discussion referenced federal definitions used by the IRS and examples of local zoning disputes and home-based religious gatherings as background to the oversight question.

Members also discussed how potential abuses or excessive rental arrangements might be discovered and reviewed, with the IRS and local assessors cited as possible reviewers in different scenarios. Committee members asked whether there should be additional guardrails to ensure rent charged would be reasonable relative to a housing allowance after allowable expenses are deducted; supporters said existing administrative channels and fact patterns would generally address outlier cases.

After debate the committee advanced the amendment and the bill. The clerk recorded a roll-call vote of 15 ayes and 1 no on both the amendment and the final motion to recommend passage as amended. The committee chair directed that the bill move to the consent calendar.

Procedural and scheduling notes: committee leadership announced two other scheduled work sessions, on SB 249 and SB 83, were postponed and would not be considered at this meeting; both items will be rescheduled, earliest in two weeks. Committee members were also reminded of a field trip to the NASH scheduled for 11 a.m. the next day and of housekeeping items for lockers and drawers.

The committee closed an executive session on SB 291 after the votes and adjourned the work session.