Bill
Bill > A5204
NJ A5204
NJ A5204Expands certificate of need requirement to certain sale or lease agreements involving hospitals.
summary
Introduced
06/04/2026
06/04/2026
In Committee
06/04/2026
06/04/2026
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," which is a state-level approval process to ensure new healthcare facilities or services are necessary and won't negatively impact existing ones, to certain agreements involving hospitals and real estate investment trusts (REITs). REITs are companies that own, operate, or finance income-producing real estate. Under this bill, a hospital owner cannot sell or lease the land their hospital sits on to a REIT if the deal could harm public health or the hospital's financial stability, unless they first obtain a certificate of need from the Department of Health, which will consider the applicants' relevant work experience. The bill also mandates that such sale or lease agreements use a standard form developed by the Department of Health, which will include provisions allowing buyers or lessees to reclaim some money if performance targets aren't met, requiring hospital owners to prioritize a lessee's offer to buy the hospital, and permitting reduced rent during financially unstable periods. Additionally, hospitals leasing their property from a REIT will have to submit annual financial statements detailing lease-related costs to the Department of Health.
Committee Categories
Health and Social Services
Sponsors (2)
Last Action
Introduced, Referred to Assembly Health Infrastructure Committee (on 06/04/2026)
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/A5204 | 06/01/2026 |
| BillText | https://pub.njleg.gov/Bills/2026/A5500/5204_I1.HTM | 06/06/2026 |
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