NJ Non-Profit Hospitals Might Be Required To Pay Impact Fees To Municipalities

By David Madden

TRENTON, N.J., (CBS) -- A recent court decision in New Jersey has non-profit hospitals worried about their tax-exempt status. There's legislation aimed at addressing those concerns while dealing with what those hospitals have become.

The court found a problem with profitable medical providers operating within non-profit facilities. Legislators concede things have changed over the years.

"The kind of business that's conducted there some of it is more for profit than what an old traditional hospital may have been," Gloucester County Assemblyman John Burzichelli told KYW Newsradio, " but they're not subject to property tax. Yet they do have impact."

A bill making its way through the legislature is aimed at addressing the problem.

"The legislature has taken upon a course here to establish essentially a framework for a modified payment in lieu of taxes," Burzichelli said. "So an impact fee will come to the community and to the county where these hospitals are situated."

That fee could raise upwards of $21 million a year and hospitals in financial trouble could apply for an exemption.

The measure passed in a senate committee last month and awaits committee action in the assembly. Burzichelli hopes to get the bill passed in the traditional rush before the legislative session ends next week.

Should the bill get to Governor Chris Christie's desk, it's unclear what he might do with it.