House committee hears bill to broaden property-tax exemption for church housing, limit set at six units

Senate Bill 291, which would expand property-tax exemptions for church-owned housing used for religious purposes, was the subject of an extended public hearing before the House Ways and Means Committee on May 1. The bill, introduced to the committee by Sen. Tim Lang (R‑District 2) on behalf of Sen. Abbas, would clarify that housing owned by a house of worship and used to advance its religious mission can be tax exempt even when occupied by designated church employees or used for small congregate residential programs.

Supporters said the measure addresses a change in practice: clergy increasingly live in privately owned homes while church-owned parsonages remain on church lots and sometimes are repurposed. "The intent was not to allow, for lack of a better phrase, a commercial rental unit, but to allow the church to continue its works," Sen. Tim Lang said. He described uses such as placing a part‑time staff member in a parsonage or operating a small congregate program for people recovering from addiction as examples of activities that advance a church's mission.

The bill would explicitly allow up to six residential or congregate housing units on church lots to be treated as exempt when those units are used for religious purposes. It also adds language that such land and structures remain subject to "objective and defined regulations" for height, yard sizes, lot area, setbacks, open space, building coverage and DES (Department of Environmental Services) requirements, the senator said.

Why it matters: municipalities, assessors and municipal advocates warned the committee that the proposal could remove sites from the local property-tax base and erode municipal revenues. Brody Deshanes of the New Hampshire Municipal Association said the bill has two distinct features: (1) an apparently unlimited exemption for housing occupied by church employees and (2) a separate new exemption for up to six rental or congregate units that could be used more broadly unless the term "religious purposes" is narrowly defined. "It could be difficult for municipalities to try to interpret whether or not it's truly a religious use," Deshanes said. He added that the draft also contains a zoning mandate with an effective date that municipalities may not have time to address before it takes effect.

Municipal and legal concerns: Danielle Pasek, Concord city attorney, told the committee the bill contains ambiguities. She noted that the text as drafted could allow new construction or property purchases to qualify immediately—potentially bypassing the five‑year ownership language in one part of the draft. Pasek raised the prospect that a church-owned nursing home or other facility could be interpreted as a religious use and therefore become exempt unless the bill is tightened.

Supporters and housing advocates: Nick Taylor, director of Housing Action New Hampshire, testified in support and framed the proposal as one small way to increase affordable housing supply by enabling religious institutions to make better use of existing land and structures. Taylor said the senate removed an earlier version's unlimited density and replaced it with the six‑unit cap during the amendment process.

Religious and advocacy perspectives: Ian Hewitt, attorney for Cornerstone (a Christian advocacy organization), argued churches historically carry out community‑oriented services as part of their religious mission and that the bill removes barriers that could discourage churches from offering housing or other services. Hewitt and other testifiers said churches have encountered aggressive tax assessments and zoning restrictions in some towns.

Questions from committee members focused on multiple points: how "religious purposes" would be defined and verified by assessors; whether renting units at market rates to members of the public could be interpreted as advancing a church's mission; whether the six‑unit cap is sufficient; how the bill's "same lot" language would apply when parsonages are on separate tax lots owned by a church; and whether the effective dates and zoning mandates give municipalities enough time to respond.

Clarifications offered on the record: Sen. Lang and others said the sponsor's reading is that the exemption applies only to lots owned by the church and that reasonable zoning rules—height, setbacks, lot coverage, and DES compliance—remain enforceable. Several committee members said they wanted explicit statutory definitions and drafting clarifications before any final vote.

What happens next: Committee members urged further work on amendments to clarify (1) the definition of "religious purposes," (2) limits on commercial rental uses and revenue‑raising, (3) whether existing case‑law language such as "appertaining to" should be used to constrain the exemption, and (4) the effective date for municipal compliance with the zoning mandate. The hearing record includes potential amendment discussions and offers by stakeholders to draft language for a future work session.

Ending note: Witnesses on both sides asked for additional drafting time and for the committee to coordinate with municipal and legal stakeholders to resolve ambiguities before the measure proceeds. The committee closed public testimony and indicated further consideration at a work session would follow.