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EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
*sb0832*
SENATE BILL 832
J3 6lr3368
CF HB 1136
By: Senator Hershey
Introduced and read first time: February 6, 2026
Assigned to: Finance
A BILL ENTITLED
AN ACT concerning 1
Nonprofit Hospitals – Community Benefits 2
FOR the purpose of requiring certain nonprofit hospitals to provide a certain value of 3
community benefits each year; requiring the Health Services Cost Review 4
Commission to report on the complianc e of nonprofit hospitals with the community 5
benefits requirement to the Attorney General and the Comptroller; authorizing the 6
Comptroller to revoke the tax –exempt status of a nonprofit hospital under certain 7
circumstances; altering the requirements of a co mmunity benefit report; and 8
generally relating to nonprofit hospitals and community benefits. 9
BY repealing and reenacting, with amendments, 10
Article – Health – General 11
Section 19–303 12
Annotated Code of Maryland 13
(2023 Replacement Volume and 2025 Supplement) 14
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 15
That the Laws of Maryland read as follows: 16
Article – Health – General 17
19–303. 18
(a) (1) In this section the following words have the meanings indicated. 19
(2) “CHARITY CARE ” MEANS FREE AND REDUCED –COST CARE 20
REQUIRED UNDER § 19–214.1 OF THIS TITLE. 21
[(2)] (3) “Commission” means the Health Services Cost Review 22
Commission. 23
2 SENATE BILL 832
[(3)] (4) (i) “Community benefit” means a planned, organized, and 1
measured activity that is intended to meet identified community health needs within a 2
service area. 3
(ii) “Community benefit” may include: 4
1. A community health service; 5
2. Health professional education; 6
3. Research; 7
4. A financial contribution; 8
5. A community–building activity, including partnerships 9
with community–based organizations; 10
6. Charity care; 11
7. An activity described under subparagraph (i) of this 12
paragraph that is funded by a foundation; 13
8. A mission–driven health service; 14
9. An operation related to an activity described under 15
subparagraph (i) of this paragraph; 16
10. Financial or in–kind support of the Maryland Behavioral 17
Health Crisis Response System; [and] 18
11. A community health worker workforce program 19
established in accordance with § 19–303.1 of this subtitle; AND 20
12. GOVERNMENT–SPONSORED INDIGENT CARE. 21
[(4)] (5) “Community Benefit Reporting Workgroup” means the 22
Community Benefit Reporting Workgroup established in accordance with subsection (b) of 23
this section. 24
[(5)] (6) “Community health needs assessment” means the process 25
required by the Affordable Care Act by which unmet community health care needs and 26
priorities are identified by a nonprofit hospital in accordance with § 501(r)(3) of the Internal 27
Revenue Code. 28
SENATE BILL 832 3
(7) “GOVERNMENT–SPONSORED INDIGENT C ARE” MEANS THE 1
UNREIMBURSED COST TO A HOSPITAL OF PROVID ING HEALTH CARE SERV ICES TO 2
RECIPIENTS OF A GOVE RNMENT–BASED INDIGENT HEALT H CARE PROGRAM , 3
INCLUDING THE MARYLAND MEDICAL ASSISTANCE PROGRAM. 4
(B) (1) THIS SUBSECTION DOES NOT APPLY TO A NONPR OFIT HOSPITAL 5
LOCATED IN A COUNTY WITH A POPULATION OF FEWER THAN 50,000 PEOPLE. 6
(2) A NONPROFIT HOSPITAL ANNUALLY SHALL PROVIDE COMMUNITY 7
BENEFITS THAT: 8
(I) EQUAL AT LEAST 100% OF THE VALUE OF THE HOSPITAL’S 9
TAX–EXEMPT BENEFITS; OR 10
(II) EQUAL AT LEAST 5% OF THE VALUE OF THE HOSPITAL’S NET 11
PATIENT REVENUE , IF THE VALUE OF ALL CHARITY CARE PROVIDE D EQUALS AT 12
LEAST 4% OF THE VALUE OF THE HOSPITAL’S NET PATIENT REVENUE. 13
(3) WITHIN 120 DAYS AFTER THE END OF A NONPROF IT HOSPITAL’S 14
FISCAL YEAR , THE NONPROFIT HOSPIT AL SHALL FILE A STAT EMENT WITH THE 15
COMMISSION, DETAILING HOW THE NO NPROFIT HOSPITAL HAS PROVIDED THE 16
COMMUNITY BENEFITS REQUIRED UNDER PARAGRAPH (2) OF THIS SUBSECTION. 17
(4) ON OR BEFORE DECEMBER 1 EACH YEAR , BEGINNING IN 2028, 18
THE COMMISSION SHALL SUBM IT TO THE ATTORNEY GENERAL AND THE 19
COMPTROLLER: 20
(I) A REPORT IDENTIFYING E ACH NONPROFIT HOSPIT AL, IF 21
ANY, THAT FAILED TO PROVI DE THE COMMUNITY BEN EFITS REQUIRED UNDER 22
PARAGRAPH (2) OF TH IS SUBSECTION IN THE IMMEDIATELY PRECEDIN G FISCAL 23
YEAR; AND 24
(II) FOR EACH NONPROFIT HOSPITAL IN THE STATE, A REPORT 25
ON: 26
1. THE AMOUNT OF COMMUNI TY BENEFITS PROVIDED 27
BY THE HOSPITAL; 28
2. THE COST TO THE HOSPI TAL OF EACH COMMUNIT Y 29
BENEFIT, INCLUDING AN ITEMIZED LI ST OF THE COST TO TH E HOSPITAL FOR 30
PROVIDING CHARITY CARE AND GOVERNMENT–SPONSORED INDIGENT CARE; 31
3. THE AMOUNT OF NET PATIENT REVENUE; 32
4 SENATE BILL 832
4. THE AMOUNT THAT WOULD EQUAL 4% OF NET 1
PATIENT REVENUE; 2
5. AN ITEMIZED CALCULATI ON DEMONSTRATING 3
WHETHER THE COMMUNIT Y BENEFITS PROVIDED BY THE HOSPITAL MEET THE 4
REQUIREMENTS OF PARAGRAPH (2) OF THIS SUBSECTION; 5
6. THE VALUE OF THE TAX EXEMPTIONS THE HOSPITAL 6
CLAIMED DURING THE IMMEDIATELY PRECEDING TAXABLE YEAR; AND 7
7. THE AMO UNT OF CHARITY CARE EXPENSES 8
REPORTED IN THE HOSPITAL’S MOST RECENT AUDITED FINANCIAL STATEMENT. 9
(5) (I) ON RECEIPT OF THE REP ORT REQUIRED UNDER 10
PARAGRAPH (4)(I) OF THIS SUBSECTION, THE COMPTROLLER SHALL VERIFY THAT 11
EACH NONPROFIT HOSPITAL IDENTIFIED IN THE REPORT HAS FAILE D TO COMPLY 12
WITH PARAGRAPH (2) OF THIS SUBSECTION. 13
(II) IF THE COMPTROLLER FINDS THA T A NONPROFIT 14
HOSPITAL HAS NOT COM PLIED WITH PARAGRAPH (2) OF THIS SUBSECTION , THE 15
COMPTROLLER SHALL REV OKE THE TAX –EXEMPT STATUS OF THE HOSPITAL FOR 16
THE IMMEDIATELY FOLLOWING TAXABLE YEAR. 17
(III) A NONPROFIT HOSPITAL M AY CURE A FINDING OF 18
NONCOMPLIANCE BY THE COMPTROLLER BY PROVING THAT THE NONCOMPLIANCE 19
WAS A RESULT OF UNIN TENTIONAL MISCALCULA TION AND PROVIDING T HE 20
REMAINING REQUIRED COMMUNITY BENEFITS. 21
(IV) THE COMPTROLLER SHALL REI NSTATE THE TAX –EXEMPT 22
STATUS OF A HOSPITAL THAT CURES A FINDING OF NONCOMPLIANCE UND ER 23
SUBPARAGRAPH (III) OF THIS PARAGRAPH. 24
(V) A HOSPITAL MAY CURE A FINDING OF NONCOMPLI ANCE 25
UNDER SUBPARAGRAPH (III) OF THIS PARAGRAPH ONLY ONCE. 26
[(b)] (C) (1) The Commission shall establish a Community Benefit Reporting 27
Workgroup. 28
(2) The Community Benefit Reporting Workgroup shall be composed of 29
individuals and stakeholder groups that have knowledge of and are impacted by hospital 30
community benefit spending. 31
SENATE BILL 832 5
[(c)] (D) The Commission shall adopt regulations to implement the 1
recommendations of the Community Benefit Reporting Workgroup, that: 2
(1) Establish a standard format for reporting the information required 3
under this subsection; 4
(2) Specify the date by which each nonprofit hospital is required to submit 5
the annual community benefit report; 6
(3) Require each nonprofit hospital to solicit and take into account input 7
received from individuals who represent the b road interests of that community, including 8
individuals with special knowledge of or expertise in public and behavioral health in 9
accordance with § 501(r)(3) of the Internal Revenue Code; 10
(4) Require each nonprofit hospital to conduct its community health needs 11
assessment in consultation with community members as recommended by the Community 12
Benefit Reporting Workgroup and to submit an annual community benefits report to the 13
Commission detailing the community benefits provided by the hospital during the 14
preceding year that includes: 15
(i) The mission statement of the hospital; 16
(ii) A list of the activities that were undertaken by the hospital to 17
address the identified community health needs within the hospital’s community; 18
(iii) The cost to the hospital of each community benefit activity , 19
INCLUDING AN ITEMIZED REPORT OF THE COST TO THE HOSPITAL FOR PROVIDING 20
CHARITY CARE AND GOVERNMENT–SPONSORED INDIGENT CARE; 21
(iv) A description of how each of the listed activities addresses the 22
community health needs of the hospital’s community; 23
(v) A description of efforts taken to evaluate the effectiveness of each 24
community benefit activity; 25
(vi) A description of gaps in the availability of providers to serve the 26
community; 27
(vii) A description of the hospital’s efforts to track and reduce health 28
disparities in the community that the hospital serves; 29
(viii) A list of the unmet community health needs identified in the 30
most recent community health needs assessment; [and] 31
(ix) A list of tax exemptions the hospital claimed during the 32
immediately preceding taxable year, in accordance with State law; AND 33
6 SENATE BILL 832
(X) THE TOTAL OPERATING E XPENSES OF THE HOSPI TAL FOR 1
THE IMMEDIATELY PREC EDING FISCAL YEAR , COMPUTED USING GENER ALLY 2
ACCEPTED ACCOUNTING PRINCIPLES FOR HOSPITALS. 3
[(d)] (E) The Commission shall establish a method through which State and 4
local governing bodies are made aware of the meetings of the Community Benefit Reporting 5
Workgroup. 6
(F) IF THE COMMISSION FINDS THAT A NONPROFIT HOSPITAL HAS FAILED 7
TO SUBMIT THE ANNUAL COMMUNITY BENEFITS R EPORT REQUIRED UNDER 8
SUBSECTION (D)(4) OF THIS SECTION, THE COMMISSION SHALL: 9
(1) PROVIDE THE NONPROFIT HOSPITAL WITH WRITTE N NOTICE 10
THAT THE HOSPITAL HAS FAILED TO FILE THE REQUIRED REPORT; AND 11
(2) IF THE HOSPITAL HAS S TILL FAILED TO SUBMI T THE REPORT 12
WITHIN 10 DAYS AFTER THE NONPR OFIT HOSPITAL HAS BE EN PROVIDED WITH 13
WRITTEN NOTICE: 14
(I) FOR A HOSPITAL WITH A BED COUNT OF 30 OR FEWER , 15
IMPOSE A CIVIL MONETARY PENALTY OF $600 FOR EACH DAY THE HOSPITAL FAILS 16
TO SUBMIT THE REPORT; 17
(II) FOR A HOSPITAL WITH A BED COUNT OF AT LEAS T 31 BUT 18
NOT MORE THAN 549, IMPOSE A CIVIL MONET ARY PENALTY OF $20 PER BED FOR 19
EACH DAY THE HOSPITAL FAILS TO SUBMIT THE REPORT; OR 20
(III) FOR A HOSPITAL WITH A BED COUNT OF 550 OR MORE , 21
IMPOSE A CIVIL MONET ARY PENALTY OF $11,000 FOR EACH DAY THE HOS PITAL 22
FAILS TO SUBMIT THE REPORT. 23
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 24
October 1, 2026. 25