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Council, coalition opposing right-of-first-refusal plan

A coalition of nonprofit associations including the Providers’ Council, Mass. Nonprofit Network and seven others is opposing section 27 of House Bill 3908, which would give municipalities the right of first refusal when a nonprofit organization seeks to sell or convert tax-exempt property.

Testimony on H.3908 was heard Tuesday at the State House by the Joint Committee on Revenue, chaired by Sen. Michael Rodrigues and Rep. Jay Kaufman, both of whom were in attendance, as were Rep. Shawn Dooley, Rep. Thomas Stanley, Rep. Denise Provost and Rep. Timothy Toomey.

MNN CEO Jim Klocke presented testimony on behalf of the coalition, laying out several points of concern, including:

  • Section 27 would unilaterally change property rights of nonprofits, treating them differently than any other business sector in the Commonwealth;
  • The proposal would make it considerably more difficult for nonprofits to sell property as well as to develop innovative new uses for property they currently own;
  • It adversely affects a nonprofit’s ability to appropriately dispose of property assets in a fair and timely fashion, and would turn it into a complex, costly and delay-prone process; and
  • It is unworkable for nonprofits that invest in and develop affordable housing for sale to homeowners as the act of signing an agreement to sell a renovated home would trigger the obligation to offer the home to the municipality.

Klocke’s testimony also pointed out that there are currently federal and state laws that regulate conversions of nonprofits to for-profits and that the Attorney General’s Office has the authority to review property sales and other actions taken by nonprofits.

The complete testimony from the coalition can be read here.  The State House News Story can be read here.

In addition to the Council and MNN, the rest of the coalition opposing H.3908 is Association of Behavioral Healthcare, Mass. Association of Nonprofit Schools & Colleges, Mass. Hospital Association, Association of Independent Colleges & Universities in Massachusetts (AICUM), Conference of Boston Teaching Hospitals, NAIOP Massachusetts and the Greater Boston Real Estate Board.

Testimony in support of the bill and Section 27 in particular came from the Massachusetts Municipal Association, Lt. Gov. Karyn Polito and representatives of the Division of Local Services.

For information about the right-of-first-refusal proposal or other legislative matters, contact Bill Yelenak.