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Senate bill would hold nonprofit hospitals to community‑benefit promise; hospitals urge alignment with recent reporting rule
Summary
Senate Bill 560 would tighten reporting and accountability for nonprofit hospitals' community benefit commitments tied to property‑tax exemptions and create a mechanism to reallocate shortfalls to unaffiliated critical access hospitals; hospitals urged alignment with recent 2023 reporting rules.
Senator Matt Regier introduced Senate Bill 560, calling for accountability from nonprofit hospitals that receive property‑tax exemptions in exchange for community benefit. Regier cited a 2020 legislative audit estimating roughly $146 million in property‑tax exemptions for nonprofit hospitals and said the bill would require reporting and give the Department of Public Health and Human Services authority to create rules and, if a hospital falls short of its community‑benefit commitment relative to its property‑tax liability, assess a fee to fund a state special account distributed to certain unaffiliated critical access hospitals.
Representatives of major hospital systems — including Billings Clinic and Logan Health — opposed the bill's technical approach and urged coordination with House Bill 45 (2023), which already required Schedule H submission and community benefit reporting and prompted DPHHS rulemaking last year. Hospitals said the new bill's reporting timing and calculation methods could be duplicative, and several witnesses recommended reconciling the bill with existing statutory reporting and newly promulgated rules. Intermountain Health and other hospital witnesses raised concerns that the bill's definition of "affiliation" could exclude many critical access hospitals that currently receive system support and asked for clarity about appeals and calculations of tax liability.
The Department of Public Health and Human Services Office of Inspector General and the Legislative Audit Division offered informational material and the audit that motivated questions about transparency and consistency. Committee members discussed amendments suggested by hospital representatives — including delaying effective dates, clarifying affiliation definitions, and allowing multi‑year reconciliation — and the sponsor signaled willingness to work on those changes. The committee ultimately passed the bill in executive action; the department will continue rule coordination and hospitals and the sponsor discussed follow‑up amendment language to reconcile reporting timeframes and definitions.
