#b#New Bill Proposes PILOTs for Hospitals#/b#

The repercussions of a lawsuit over the tax exempt status of Morristown Medical Center continue to unfold as lawmakers have introduced a bill that would require hospitals to pay fees in lieu of taxes to help fund the municipalities where they are located.

A tax court ruled last month partially in favor of the township in a lawsuit that sought to overturn the hospital’s tax exempt nonprofit status because of its business relationships with for-profit companies.

The new law seeks to clarify the tax status of hospitals by declaring them exempt from property taxes but requiring them to pay a PILOT contribution of $2.50 per bed per day, plus $250 a day for satellite emergency care facilities.

The New Jersey Hospital Association, a trade group based on Alexander Road, came out in support of the bill, as it would save other hospitals from copycat lawsuits.

The League of Municipalities came down on the opposite side, saying the law is too generous to hospitals and that it unfairly places the tax burden on homeowners and other businesses.

#b#University Loses Appeal in Tax Lawsuit#/b#

In a legal defeat for Princeton University, an appeals court has upheld an earlier decision by Tax Court judge Vito Bianco that the school has to prove it deserves to retain its tax-exempt status.

The ruling is part of an ongoing legal battle between Princeton and a group of residents led by attorney Bruce Afran, who have sued to force the school to pay property taxes. Princeton is currently exempt from local taxes because of its nonprofit status, but Afran has argued that Princeton’s business dealings, its licensing of technology, and its relationships with corporations make it a commercial organization.

Bianco ruled this fall that the burden of proof lies with the university, not the residents, in the case.

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