Assembly Commerce, Economic Development and Agriculture Committee Statement, No. 5470 (November 24, 2025)

Summary

Assembly Commerce, Economic Development and Agriculture Committee statement to Assembly, No. 5470 with committee amendments, State of New Jersey, dated November 24, 2025. The committee reports favorably and with committee amendments Assembly Bill No. 5470, which as amended modifies provisions of the New Jersey Aspire Program related to institutional projects and distressed hospital projects. The statement says a distressed hospital project would be eligible for an incentive award equal to 85 percent of project costs and an institutional project 80 percent, each limited to a maximum value of $120 million, and that the developer of an institutional project must contribute capital of at least $30 million. It says the bill is identical to Senate Bill No. 4135 (1R).

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ASSEMBLY COMMERCE, ECONOMIC DEVELOPMENT AND
           AGRICULTURE COMMITTEE

                           STATEMENT TO

                      ASSEMBLY, No. 5470
                          with committee amendments



       STATE OF NEW JERSEY
                         DATED: NOVEMBER 24, 2025

           The Assembly Commerce, Economic Development and
      Agriculture Committee reports favorably and with committee
      amendments Assembly Bill No. 5470.
           As amended, this bill modifies certain provisions of the “New
      Jersey Aspire Program” (Aspire Program) related to the construction
      of institutional projects and distressed hospital projects.
           Under the bill, the term “institutional project” is defined as a
      redevelopment project that is developed by, or in affiliation with, an
      institution of higher education with a research activity designation of
      Research 1 (R1) or Research 2 (R2) from the Carnegie Classification
      of Institutions of Higher Education, and for which at least 51 percent
      of the square footage of the project is dedicated for the use of qualified
      research and development. “Qualified research and development” is
      defined as research and development activities that are undertaken
      within a priority industry, including, but not limited to, technology,
      artificial intelligence, software development, financial services,
      financial services technology, film and digital media, advanced
      manufacturing,        gaming,       pharmaceuticals,        biotechnology,
      transportation, logistics, and renewable energy.
           The bill defines a “distressed hospital project” as a health care or
      health services center, hospital, or hospital system that: (1) operates a
      minimum of four general acute care hospitals licensed by the State; (2)
      incurred average annual expenses not less than $250,000 for the
      provision of charity care services, not including the value of charity
      care subsidies or reimbursements received through any governmental
      assistance program, as measured by the five most recent calendar
      years, immediately preceding the date of application for the program,
      for which audited financial statements are available; (3) and is owned
      or leased by an organization that is exempt from federal taxation
      pursuant to section 501(c)(3) of the federal Internal Revenue Code,
      including any wholly-owned subsidiary of an exempt organization,
      which organization or subsidiary has filed a bankruptcy petition
      pursuant to Title 11 of the United States Code.
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    The bill modifies the calculation of “project costs” for distressed
hospital projects and institutional projects. For a distressed hospital
project, the bill authorizes the inclusion of land costs, in an amount not
to exceed 20 percent of the eligible project cost, within the calculation
of “project cost.” The bill also requires the calculation of the “project
cost” of an institutional project to include the construction and
completion of: research workspaces; meeting, classroom, dining, and
dormitory spaces; and common areas, including, but not limited to,
hallways, utility rooms, storage areas, and parking components.
    The bill also makes certain changes related to the requirement for
the developer of a redevelopment project to commit capital for the
project. Under current law, the developer is required to contribute
capital of at least 20 percent of the total project costs, except that if the
project is located in a government-restricted municipality, the
developer only is required to contribute capital of at least 10 percent of
the total project cost. Instead, the bill provides that the developer of an
institutional project is required to contribute capital of at least $30
million, regardless of the overall cost of the project, except when the
project is located in a government-restricted municipality. The bill
also exempts the developer of a distressed hospital project from this
requirement.
    Additionally, the bill permits the developer of a distressed hospital
project to elect an eligibility period not to exceed five years, rather
than require an eligibility period not to exceed 10 years for such a
project. The bill also exempts distressed hospital projects from certain
requirements of the Aspire Program, including: (1) the evaluation of
the project’s rate of return on investment and related requirements,
including a requirement that a developer pay up to 20 percent of the
amount in excess of the reasonable and appropriate rate of return on
investment; and (2) the requirement to enter into a community benefits
agreement for certain projects whose total project cost equals or
exceeds $10 million.
    The bill requires the authority to rescind an award and recapture all
or part of any tax credits awarded, including all or part of any tax
credits claimed by the developer, if a distressed hospital project ceases
to operate any general acute care hospital during the eligibility period.
    The bill also increases the amount of tax credits that may be
awarded to a distressed hospital project or institutional project in most
circumstances. Under the bill, a distressed hospital project is eligible
for an incentive award equal to 85 percent of project costs, which
incentive award is limited to a maximum value of $120 million. The
bill provides that an institutional project is eligible for an incentive
award equal to 80 percent of project costs, which incentive award is
limited to a maximum value of $120 million.
    The bill provides that an institutional project or a distressed
hospital project is not subject to the net benefit analysis that is required
for certain other redevelopment projects. Under current law, an
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exemption from the net benefit analysis is only provided for
investments in residential projects, food delivery sources, and health
care or health services centers.
    The bill also provides similar changes for institutional projects or
distressed hospital projects that qualify as transformative projects
under the Aspire Program. Under the bill, a distressed hospital project
is required to include 200,000 or more square feet to qualify as a
transformative project. The bill exempts qualified institutional
projects and distressed hospital projects from the net benefit analysis
requirement for transformative projects.
    The bill also exempts distressed hospital projects that are
transformative projects from requirements that the authority review the
project financing gap and re-evaluate the developer’s rate of return at
certain intervals. The bill provides that distressed hospital projects are
eligible for an incentive award equal to 85 percent of project costs.
Under the bill, institutional projects are eligible for an incentive award
equal to 80 percent of project costs. A transformative project of either
type is eligible for an incentive award valued at up to $400 million or
the amount of the project financing gap.
    As amended and reported by the committee, Assembly Bill No.
5470 is identical to Senate Bill No. 4135 (1R), which was also
amended and reported by the committee on this date.

COMMITTEE AMENDMENTS:
    The committee amended the bill to:
    (1) define a “distressed hospital project” to mean a health care or
health services center, hospital, or hospital system that: operates a
minimum of four general acute care hospitals licensed by the State;
incurred average annual expenses not less than $250,000 for the
provision of charity care services, not including the value of charity
care subsidies or reimbursements received through any governmental
assistance program, as measured by the five most recent calendar
years, immediately preceding the date of application for the program,
for which audited financial statements are available; and is owned or
leased by an organization that is exempt from federal taxation pursuant
to section 501(c)(3) of the federal Internal Revenue Code, including
any wholly-owned subsidiary of an exempt organization, which
organization or subsidiary has filed a bankruptcy petition pursuant to
Title 11 of the United States Code;
    (2) change the definition of "institutional project" to include a
requirement that the redevelopment project be developed by, or in
affiliation with, an institution of higher education with a research
activity designation of Research 1 (R1) or Research 2 (R2) from the
Carnegie Classification of Institutions of Higher Education;
    (3) permit the developer of a distressed hospital project to elect an
eligibility period not to exceed five years, rather than require an
eligibility period not to exceed 10 years for such project;
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    (4) include land costs, in an amount not to exceed 20 percent of the
eligible project cost, within the project cost of a distressed hospital
project;
    (5) exempt the developer of a distressed hospital project from the
requirement to contribute capital based on a minimum percent of the
total project cost. Under current law, a developer is required to
contribute capital of at least 20 percent of the total project cost, with
certain exceptions;
    (6) exempt distressed hospital projects from the required
evaluation of the project’s rate of return on investment and related
requirements, including a requirement that a developer pay up to 20
percent of the amount in excess of the reasonable and appropriate rate
of return on investment;
    (7) exempt a distressed hospital project from the requirement to
enter into a community benefits agreement for certain projects whose
total project cost equals or exceeds $10 million;
    (8) require the authority to rescind an award and recapture all or
part of any tax credits awarded, including all or part of any tax credits
claimed by the developer, if a distressed hospital project ceases to
operate any general acute care hospital during the eligibility period;
    (9) provide that the developer of a distressed hospital project is to
receive a total tax credit not to exceed 85 percent of the eligible project
costs, which value is not to exceed $120 million;
    (10) provide that a distressed hospital project that includes 200,000
or more square feet may qualify as a transformative project. These
transformative projects would receive a total tax credit not to exceed
85 percent of the eligible project costs, subject to the existing
aggregate limitations for all other transformative projects;
    (11) exempt distressed hospital projects that are transformative
projects from the requirement that the authority review the project
financing gap and re-evaluate the developer’s rate of return at certain
intervals;
    (12) exempt distressed hospital projects, including those that are
transformative projects, from the net benefit test otherwise required
under current law; and
    (13) provide technical changes to the bill, including updating
underlying statutory language to reflect recent enactments of law.


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