Bill Text: NJ A3635 | 2016-2017 | Regular Session | Introduced
Bill Title: Temporarily maintains property tax exemption for previously exempt non-profit hospital properties; establishes "Non-Profit Hospital Property Tax Exemption Study Commission."
Spectrum: Strong Partisan Bill (Democrat 10-1)
Status: (Introduced - Dead) 2016-04-14 - Introduced, Referred to Assembly Housing and Community Development Committee [A3635 Detail]
Download: New_Jersey-2016-A3635-Introduced.html
Sponsored by:
Assemblyman HERB CONAWAY, JR.
District 7 (Burlington)
SYNOPSIS
Temporarily maintains property tax exemption for previously exempt non-profit hospital properties; establishes "Non-Profit Hospital Property Tax Exemption Study Commission."
CURRENT VERSION OF TEXT
As introduced.
An Act concerning the property tax status of non-profit hospitals.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. If property used in the work of non-profit associations and corporations organized exclusively for hospital purposes was exempt or partially exempt from property taxation in tax year 2015, that property shall continue to be exempt from property taxation, to the same extent, for tax years 2016 and 2017, notwithstanding any provisions of R.S.54:4-3.6 to the contrary. Any litigation or other action to subject such property to property taxation in tax years 2016 and 2017 is ultra vires and shall be withdrawn.
2. a. There is established in, but not of, the Department of the Treasury, an advisory commission to be known as the "Non-Profit Hospital Property Tax Exemption Study Commission." The commission shall consist of nine members as follows: the State Treasurer, who shall serve as chairperson of the commission, ex officio; the Commissioners of Health and Community Affairs, ex officio; the Secretary of Higher Education, ex officio; the Executive Director of the New Jersey Health Care Facilities Financing Authority, ex officio; and four members, appointed by the Governor, one who shall be a member of the public with expertise in the field of property taxes and recommended by the President of the Senate, one who shall be a member of the public with expertise in the field of property taxes and recommended by the Speaker of the General Assembly, one who shall be a mayor of a municipality within which a non-profit acute care hospital is located, and one who shall be a representative of a non-profit acute care hospital or property tax-exempt institution of higher education that operates or is affiliated with a non-profit acute care hospital. Each member may designate a representative to attend meetings of the commission, and each designee may lawfully vote and otherwise act on behalf of the member who designated that individual to serve as a designee. Vacancies in the membership of the commission shall be filled in the same manner as the original appointments.
b. The members shall be appointed within 60 days following the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill). The commission shall organize as soon as practicable after the appointment of its members and shall select a secretary who need not be a member of the commission. The presence of five members of the commission shall constitute a quorum. The commission may conduct business without a quorum, but may only vote on the issuance of the report required to be submitted to the Governor and the Legislature pursuant to subsection e. of this section, and on any recommendations, when a quorum is present.
c. All commission members shall serve without compensation, but shall be eligible for reimbursement of necessary and reasonable expenses incurred in the performance of their official duties within the limits of funds appropriated or otherwise made available to the commission for its purposes.
d. The commission may meet and hold public hearings at the place or places it designates during the sessions or recesses of the Legislature.
e. The commission shall study the current non-profit hospital property tax exemption law, the modern operation of non-profit hospitals, and how property tax exemption law should be updated in light of modern non-profit hospital operations. The commission shall issue a report addressing these issues to the Governor and the Legislature, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), within one year after a quorum is appointed. The report shall also include proposals on how the non-profit hospital property tax exemption law should be updated, in light of modern non-profit hospital operations, to provide a property tax exemption system that is equitable to non-profit hospitals, municipalities, and taxpayers.
f. The commission shall expire 90 days after the issuance of the report pursuant to subsection e. of this section.
3. This act shall take effect immediately, except that section 1 of this bill shall be retroactive to assessments made as of October 1, 2015.
STATEMENT
This bill would maintain property tax exemptions for non-profit hospital properties for tax years 2016 and 2017 if such properties were exempt from property taxation in tax year 2015, and would bar any litigation or other actions to subject these properties to property taxation for those two tax years. The bill would also establish a commission, designated as the "Non-Profit Hospital Property Tax Exemption Study Commission," to study the current status of non-profit hospital property tax exemptions, and to issue a report with recommendations on how the law governing non-profit hospital property tax exemptions should be updated so that it is fair to non-profit hospitals, municipalities, and taxpayers.
Non-profit hospitals have changed substantially over the decades and the law governing property tax exemptions for their properties has not evolved with these changes. The disconnect that now exists between modern non-profit hospital operations and the law has led to a patchwork of costly litigation over whether non-profit hospitals should be subject to property taxation. This bill would preserve, for two years, the property tax-exempt status that had long existed for non-profit hospital properties, and would dismiss all litigation over the property tax status of these properties during this period of time. This temporary bar on litigation would allow a panel of experts in the relevant fields to conduct a careful study of the complex issues involved in the property taxation of non-profit hospitals, and develop proposals for consideration by the Governor and the Legislature on how the property tax exemption law should be updated to reflect modern non-profit hospital operations and provide fairness to non-profit hospitals, municipalities, and taxpayers.
