Bill
Bill > S4216
NJ S4216
NJ S4216Expands certificate of need requirement to certain sale or lease agreements involving hospitals.
summary
Introduced
05/11/2026
05/11/2026
In Committee
05/11/2026
05/11/2026
Crossed Over
Passed
Dead
Introduced Session
2026-2027 Regular Session
Bill Summary
This bill expands the certificate of need requirement to certain sale or lease agreements involving hospitals. Under the bill, an entity or a person with ownership interest in a hospital is to be prohibited from entering into a sale or lease agreement with a real estate investment trust for an interest in the real property upon which the hospital is located, if the terms of the sale or lease would place the public health at risk or weaken the long-term financial status of the hospital, as determined by the Department of Health (department), and unless the entity or person and the real estate investment trust have applied for and received a certificate of need. In determining whether to issue a certificate of need, the department is to consider the applicants' work experience as it pertains to the sale or lease agreement. The bill provides that a sale or lease agreement with a real estate investment trust for an interest in the real property upon which the hospital is to be executed using a standard sale or lease agreement form, which is to be developed by the department. The form is to contain provisions: 1) permitting the buyer or lessee to reclaim a portion of the lease price, purchase price, or previously distributed funds from the seller or lessor if specific, agreed-upon performance metrics, such as revenue targets or profitability are not met following the execution of the sale or lease agreement; 2) requiring the owner of a hospital to prioritize the consideration of the lessee's offer to purchase the hospital if the owner places the hospital for sale; and 3) permitting the lessor and lessee to mutually agree upon reduced rental payments during periods in which the hospital is experiencing financial instability. Under the bill, department is to require an entity or a person with an ownership interest in a hospital that has entered into a lease agreement with a real estate investment trust for an interest in the real property upon which the hospital is located to submit to the department an annual financial statement reporting the costs associated with the lease, as determined by the department.
AI Summary
This bill expands the requirement for a "certificate of need" – essentially, official approval from the Department of Health – to certain agreements where a hospital is sold or leased to a real estate investment trust (REIT), which is a company that owns, operates, or finances income-producing real estate. Specifically, hospitals cannot enter into such sale or lease agreements if the terms could jeopardize public health or the hospital's financial stability, as determined by the Department of Health, unless they first obtain a certificate of need. When deciding whether to grant this certificate, the Department will consider the applicants' relevant work experience. The bill also mandates that these agreements use a standard form developed by the Department, which will include provisions allowing buyers or lessees to recover some money if performance targets aren't met, requiring hospital owners to prioritize a lessee's offer to buy if the hospital is for sale, and permitting reduced rent during financially difficult times for the hospital. Furthermore, hospitals leasing property from a REIT will have to submit annual financial statements to the Department detailing lease-related costs.
Committee Categories
Health and Social Services
Sponsors (2)
Last Action
Introduced in the Senate, Referred to Senate Health, Human Services and Senior Citizens Committee (on 05/11/2026)
Taxonomy
Health
- ‐ Regulation of Doctors and Health Facilities
Official Document
bill text
bill summary
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bill summary
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bill summary
| Document Type | Source Location | Created |
|---|---|---|
| State Bill Page | https://www.njleg.state.nj.us/bill-search/2026/S4216 | 05/04/2026 |
| BillText | https://pub.njleg.gov/Bills/2026/S4500/4216_I1.HTM | 05/12/2026 |
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