Report Title:

Health Care; Loan Repayments; Stipends; Enterprise Zones

 

Description:

Establishes the Hawaii Health Corps that will provide loan repayment and stipends for physicians and dentists who agree to work in health professional shortage areas and as first responders during civil defense and other emergencies. Expands the Enterprise Zone Business Tax Credit, general excise tax exemption, and other business incentives to include physicians and dentists who establish or maintain practices in areas designated as enterprise zones. Appropriates funds. (HB2519 HD2)

 


HOUSE OF REPRESENTATIVES

H.B. NO.

2519

TWENTY-FOURTH LEGISLATURE, 2008

H.D. 2

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT


 

 

RELATING TO HEALTH CARE.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 


PART I

SECTION 1. The legislature finds that many of the residents of Hawaii are increasingly unable to obtain timely and appropriate health care because of physician and dentist shortages. These shortages primarily affect the rural areas of our state. In the area of medical services, they are especially acute in disciplines such as family practice, obstetrics/gynecology, and orthopedics.

The legislature further finds that the increasingly high cost of a physician's professional education requires physicians to seek out the higher incomes that allow them to repay their student loans. However, physician salaries in rural shortage areas are often lower than those in nonshortage areas.

Loan repayment programs have been successfully used in Hawaii to increase the number of educators serving in hard-to-fill teaching positions, and can also be used to encourage and enable physicians and dentists to provide care in shortage areas. Incentives such as stipends can be provided to physicians and dentists to offset the lower salaries offered in shortage areas. Further, making the enterprise zone business tax credit and general excise tax exemption available to physicians and dentists who practice in those zones provides another incentive that will increase access to health care professionals in Hawaii's underserved areas.

PART II

SECTION 2. The purpose of this part is to establish the Hawaii health corps that will provide:

(1) Loan repayment for physicians and dentists who agree to work in health professional shortage areas of the state and as first responders during civil defense and other emergencies; and

(2) Stipends for physicians and dentists who agree to provide services in health professional shortage areas of the state and as first responders during civil defense and other emergencies.

SECTION 3. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:


Chapter

HAWAII HEALTH CORPS

    -1 Definitions. As used in this chapter, unless the context requires otherwise:

"Dentist" means a person licensed under chapter 448.

"Department" means the department of health.

"Director" means the director of health.

"Eligible education and training program" means an education and training program that leads to eligibility for licensure under chapter 453 or 448.

"Health professional shortage area" means:

(1) Areas of the state designated by the Health Resources and Services Administration of the United States Department of Health and Human Services as having shortages of primary medical care, mental health care, or dental care providers;

(2) Counties with a population of less than five hundred thousand residents;

(3) Rural areas of the state; and

(4) Areas served by community health centers.

"Loan repayment" means the payment of the lesser of up to $30,000 per year for not more than five years or twenty per cent of the amount outstanding on a loan or loans to pay for an eligible education and training program.

"Physician" means a person licensed under chapter 453.

"Program" means the Hawaii health corps program.

"Service obligation" means the physician's or dentist's duty to provide health care services in a health professional shortage area of the state and during periods declared to be an emergency by the governor, undertaken in exchange for program loan repayment or a physician or dentist stipend from the program.

    -2 Hawaii health corps program established. The Hawaii health corps program is established to encourage physicians and dentists to serve in health professional shortage areas. The program shall be administered by the department. In administering this program, the department shall, in conjunction with the John A. Burns school of medicine:

(1) Adopt rules and develop guidelines to administer the program;

(2) Identify and designate health professional shortage areas;

(3) Establish criteria for the selection, and select physicians and dentists to participate in the stipend portion of the program;

(4) Define and determine compliance with the program service obligations;

(5) Collect and manage reimbursements from loan repayment recipients who do not meet their service obligations under the program;

(6) Publicize the program, particularly to maximize participation by individuals who live in health professional shortage areas;

(7) Solicit and accept grants and donations from public and private sources for the program; and

(8) Establish criteria and procedures for calling program participants into service during a civil defense or other emergency.

    -3 Hawaii rural health care provider loan repayment program. (a) There is created the Hawaii rural health care provider loan repayment program to be administered by the department in partnership with a financial institution whose operations are principally conducted in Hawaii. The Hawaii rural health care provider program shall provide loan repayments to not more than twenty physicians or dentists per year who commit to:

(1) Serve as a physician in a health professional shortage area of the state, at the same practice site for:

(A) Three consecutive years for graduates of the John A. Burns school of medicine; and

(B) Five consecutive years for all other licensed physicians or dentists who graduated from an eligible education and training program within the United States;

and

(2) At any time during the three or five years of service under paragraph (1), serve as a physician first responder during a period declared by the governor to be an emergency;

provided that there shall be not more than one hundred participants at any given time; provided further that not more than fifteen per cent of the health care providers selected annually to receive loan repayments shall be dentists.

(b) Eligibility for loan repayments shall be determined by the department on a competitive basis. Preference for loan repayments shall be given to physicians and dentists who reside in or were residents of a health professional shortage area, and physicians who graduated from the John A. Burns school of medicine.

(c) If a loan repayment recipient fails to satisfy the recipient's service obligation, the recipient shall reimburse the program for the total amount of loan repayments received under the program, in periodic installments within a period not to exceed five years, commencing three months after the loan repayment recipient fails to honor the service obligation. The department may charge initial late fees, and the costs of collecting delinquent reimbursements of loan repayments.

(d) In accordance with chapter 103D, the department may enter into written contracts with collection agencies to collect delinquent reimbursements of loan repayments. All payments collected, exclusive of a collection agency's commissions, shall revert and be credited to the Hawaii health corps fund. A collection agency that enters into a written contract with the department to collect delinquent reimbursements of loan repayments pursuant to this section may collect a commission from the debtor in accordance with the terms of, and up to the amounts authorized in, the written contract.

(e) Liability for reimbursement of a loan repayment may be waived or the conditions of reimbursement adjusted for loan repayment recipients who fail to meet their service obligation for good cause. Liability for reimbursement of a loan repayment shall be canceled upon the death or total disability of the borrower. As used in this subsection, "total disability" shall have the same meaning as "person totally disabled" in section 235-1.

    -4 Hawaii health corps stipend. (a) The department shall award stipends of not more than $10,000 per year to not more than one hundred physicians or dentists per year who agree to:

(1) Provide during the stipend year not less than fifty per cent of their services in a health professional shortage area or not less than ten per cent of their services to uninsured patients; and

(2) Provide first responder emergency services during civil defense and other emergencies proclaimed under section 127-10 or 128-7.

(b) No limitation shall be placed on expenditure of the stipend by the recipient. The department shall determine the manner and timing of stipend payments to ensure performance of the stipend service obligation. Not more than ten years of stipends shall be paid to any one recipient. The recipient of a program loan repayment is ineligible for a stipend.

    -5 Hawaii health corps first responder service obligation. In the event of a civil defense or other emergency, proclaimed under section 127-10 or 128-7, physicians and dentists participating in the Hawaii health corps program may be ordered into service by the governor as first responders to serve in areas of the state and in a capacity determined by the director.

    -6 Criteria for selecting loan repayment and stipend recipients. The department shall establish a planning committee to assist the department in developing criteria for the selection of loan repayment and stipend recipients. The department shall include on the planning committee representatives of the department, the University of Hawaii John A. Burns school of medicine, health care facilities, provider groups, consumers, community and technical colleges, county government, and other appropriate public and private agencies and organizations.

    -7 Rules. The department shall adopt rules to implement the program. The rules shall be adopted pursuant to chapter 91, but shall be exempt from public notice and public hearing requirements.

    -8 Hawaii health corps fund. (a) There is established in the treasury of the State the Hawaii health corps fund, to be administered by the department. Any funds appropriated by the legislature for the program, gifts, donations, and grants from public agencies and private persons, reimbursements of loan repayments, proceeds of the operations of the program, and interest earned or accrued on moneys deposited in the fund shall become a part of the fund.

(b) The department may expend moneys from the fund for the purposes of this chapter."

SECTION 4. The department of health shall implement the Hawaii health corps program no later than June 30, 2009.

The director of health shall report to the legislature on the status of the Hawaii health corps program no later than twenty days prior to the convening of each regular session of the legislature beginning with the regular session of 2009.

PART III

SECTION 5. The purpose of part III of this Act is to increase access to quality health care in health care professional shortage areas by making the enterprise zone business tax credit, general excise tax exemption, and other business incentives available to physicians and dentists who establish or maintain practices in areas designated as enterprise zones.

SECTION 6. Section 209E-2, Hawaii Revised Statutes, is amended by amending the definitions of "medical and health care services" and "service business" to read:

""Medical and health care services" means diagnosis, treatment, or other acts permissible under chapters 448 and 453, but does not include medical research, clinical trials, and telemedicine[, but not routine medical treatment or services].

"Service business" means any corporation, partnership, or sole proprietorship that repairs ships, aircraft, or assisted technology equipment, provides telecommunication services, information technology design and production services, medical and health care services, [or] education and training services, or performs medical research, clinical trials, or telemedicine, as defined in this chapter."

SECTION 7. Section 209E-9, Hawaii Revised Statutes, is amended to read as follows:

"209E-9 Eligibility; qualified business; sale of property or services. (a) Any business firm may be eligible to be designated a qualified business for purposes of this chapter if the business:

(1) Begins the operation of a trade or business within an enterprise zone;

(2) During each taxable year has at least fifty per cent of its enterprise zone establishment's gross receipts attributable to the active conduct of trade or business within the enterprise zone;

(3) Increases its average annual number of full-time employees by at least ten per cent by the end of its first tax year of participation; and

(4) During each subsequent taxable year at least maintains that higher level of employment.

(b) A business firm also may be eligible to be designated a qualified business for purposes of this chapter if the business:

(1) Is actively engaged in the conduct of a trade or business in an area immediately prior to an area being designated an enterprise zone;

(2) Meets the requirements of subsection (a)(2); and

(3) Increases its average annual number of full-time employees employed at the business' establishment or establishments located within the enterprise zone by at least ten per cent annually.

(c) Subsections (a) and (b) notwithstanding, any business firm that is engaged in providing medical and health care services may be eligible to be designated a qualified business for purposes of this chapter if:

(1) The business either meets the requirements of subsection (a)(1) and (2) or (b)(1) and (2); and

(2) The business is located within a health professional shortage area of the state designated by the Health Resources and Services Administration of the United States Department of Health and Human Services as having shortages of primary medical care, mental health care, or dental care providers, and shall include any county with a population of less than five hundred thousand residents, rural areas of the state, areas served by community health centers, and any other area identified by the department of health.

[(c)] (d) After designation as an enterprise zone, each qualified business firm in the zone shall submit annually to the department an approved form supplied by the department that provides the information necessary for the department to determine if the business firm qualifies as a qualified business. The approved form shall be submitted by each business to the governing body of the county in which the enterprise zone is located, then forwarded to the department by the governing body of the county.

[(d)] (e) The form referred to in subsection (c) shall be prima facie evidence of the eligibility of a business for the purposes of this section.

[(e)] (f) Tangible personal property shall be sold at an establishment of a qualified business within an enterprise zone and the transfer of title to the buyer of the tangible personal property shall take place in the same enterprise zone in which the tangible personal property is sold. Services shall be sold at an establishment of a qualified business engaged in a service business within an enterprise zone and the services shall be delivered in the same enterprise zone in which sold. Any services rendered outside an enterprise zone shall not be deemed to be the services of a qualified business.

[(f)] (g) For any fiscal year that includes September 11, 2001, a business may use its average annual number of full-time employees as of August 31, 2001--rather than its average annual number at the end of its fiscal year including September 11, 2001--if necessary to meet the requirements of subsection (a)(3) and (4) or (b)(3). A business may also use its average annual number of full-time employees at the end of its fiscal year that includes September 11, 2001, as its base number of full-time employees if necessary to meet the requirements of subsection (a)(3) and (4) or (b)(3) in future fiscal years."

PART IV

SECTION 8. There is appropriated out of the general revenues of the State of Hawaii the sum of $      or so much thereof as may be necessary for fiscal year 2008-2009 for the creation of the Hawaii health corps program.

The sum appropriated shall be expended by the department of health for the purposes of part II of this Act.

SECTION 9. There is appropriated out of the general revenues of the State of Hawaii the sum of $     or so much thereof as may be necessary for fiscal year 2008-2009 for the administration of health care enterprise zones.

The sum appropriated shall be expended by the department of business, economic development, and tourism for the purposes of part III of this Act.


PART V

SECTION 10. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 11. This Act shall take effect on July 1, 2020; provided that section 7 shall apply to taxable years beginning and gross proceeds received after December 31, 2008.