Tax committee recommends 'ought not to pass' on bill to let municipalities limit nonprofit tax exemptions

Sen. Nicole Rechowski, chair of the Joint Standing Committee on Taxation, opened a work session on LD 438, an act that would allow municipalities to limit nonprofit property‑tax exemptions. Representative Benjamin Himes, the bill sponsor, said the measure grew out of a specific problem in his district and that further work showed the proposal “opened up a big can of worms.” He told the committee he would ask members to recommend against passage.

Himes, who said he is also an executive director of a nonprofit, told lawmakers that while municipalities have reported concerns about properties shifting off the tax rolls, the state’s role and the design of exemptions need a broader policy review. “If the state is going to continue to use nonprofits to fill gaps that the state has, there’s 2 problems here,” he said, and urged wider study rather than a narrowly targeted statutory change.

After brief discussion, Representative Shelley Rudnicki moved an 'ought not to pass' recommendation, seconded by Representative Tracy Quint. Chair Rechowski called for those in favor and the committee indicated unanimous support among members present; the chair closed the work session on LD 438.

The decision leaves the underlying policy questions — including how communities and different kinds of nonprofits are affected and whether the state should revisit exemption design — to future study. The taxation committee pointed members to ongoing work by a property‑tax task force that is compiling data and said the task force’s interim report could inform any broader proposals.

The committee did not adopt substitute language or request further drafting on LD 438 at this meeting; the sponsor said he may revisit the issue in a future session.