BISMARK – The North Dakota State Senate has passed a bill to exempt hospitals and nursing homes from property tax during construction.
House Bill 1438 would exempt public hospitals and nursing homes from paying taxes on their undeveloped properties of up to 50 acres for up to 10 years. The exemption would continue when construction of the charitable building begins. Public charitable buildings are currently exempt from property tax only if the building is occupied by the charitable institution. The bill received a 6-0 Do Pass Recommendation from the Senate Finance and Taxation committee.
Sen. Jordan Kannianen, R-Dis. 4, Stanley, said the original bill would have provided property tax exemptions for all public charities, but the Senate passed an amendment that narrowed the scope to public hospitals and nursing homes. Kannianen added that any opposition in committee was due to the fact that the bill was too broad to allow all public charities to have property tax exemptions on their undeveloped land.
“The challenge that these hospitals are having is that during the construction of their building, maybe the property taxes aren’t so bad on the undeveloped land itself, but when there’s a project being developed that takes a few years, every year the assessor will reassess the improvements on the property, giving it a higher value based on what construction happened that year,” said Kannianen. “So, you have examples of hospitals having to pay millions of dollars a year in property taxes during the construction of their facility.”
HB1438 passed the House by a vote of 55 to 38 and passed the Senate by a vote of 46 to 0. If the House agrees to the Senate amendments the bill will be sent to the governor for consideration.
