Green, Sumter, Diegnan, Watson Coleman & Giblin Bill to Help Communities Transform Idle Health Care Facilities into Newly Productive Health Care Centers Advances

(TRENTON) – Legislation sponsored by Assembly Speaker Pro Tempore Jerry Green and Assembly members Shavonda E. Sumter, Patrick J. Diegnan, Jr., Bonnie Watson Coleman and Thomas P. Giblin to help transform ailing or obsolete health care facilities into productive health care centers once again was approved Monday by a Senate panel.

“Shifts in population, economic pressures and scientific advancement often lead to the construction of new hospital facilities and the closing of older hospitals,” said Green (D-Middlesex/Somerset/Union). “This is unfortunate for the communities that house these once productive hospitals because they often contribute greatly to local employment and tax revenue. This legislation would aid in repurposing former hospitals health in a positive transition to health centers that can still provide much needed support to the community.”

“If we can help transform these former hospitals into centers for the delivery of other health care and support services then we can achieve a win-win for our communities,” said Sumter (D-Bergen/Passaic). “Barnert Hospital in Paterson is a perfect example of a productive transformation from hospital to community health center. This bill would support transitions such as Barnert’s in other areas of the state.”

The bill (A-3043) would grant corporation business tax credits to developers who make certain capital investments for repurposing qualified health care facilities. Under the bill, a qualified health care facility is any licensed health care facility that has been granted a certificate of need to cease all or partial operation. The bill restricts the function of a repurposed facility to a non-acute health care and health support services center, and requires a credit applicant to demonstrate that such an investment will not destabilize the supply and delivery of acute health care services in its market.

“A closed hospital building can quickly turn into a neighborhood eyesore,” said Diegnan (D-Middlesex). “This bill provides an incentive for developers to transform former hospitals into functioning health centers in order to provide needed health services for the community and prevent these buildings from becoming nuisances.”

“Hospitals that close to make way for newer, more advanced facilities in other locations, take away jobs and leave the communities that housed them with a gap in health care services,” said Watson Coleman (D- Mercer/Hunterdon). “This bill helps retain important health services as well as jobs and tax revenue in communities that once housed hospitals that have relocated.”

“A hospital not only provides health services, but creates jobs. When they shutter, the impact on the communities that house them is great,” said Giblin (D-Essex/Passaic). “This bill would help revive these facilities so that they can continue to contribute to the physical and economic well-being of the community where they are located.”

The bill would allow the developer of a repurposed qualified health care facility to qualify for corporation business tax credits equal to 100 percent of the capital investment, if that capital investment is at least $10 million and is applied towards repurposing a facility that will have tenants with a total of 100 or more full-time employees. Annually for ten years the taxpayer may use a credit equal to 10 percent of the qualified capital investment.

The bill was released by the Senate Economic Growth Committee. It was approved 46-25-2 by the General Assembly in January.