Report Title:

Tax Credit; Physicians; Rural Areas

 

Description:

Provides a tax credit on a sliding scale for amounts paid for medical malpractice insurance premiums by physicians that move to, and practice medicine in, rural areas. (HB1317 HD1)

 


HOUSE OF REPRESENTATIVES

H.B. NO.

1317

TWENTY-FIFTH LEGISLATURE, 2009

H.D. 1

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT


 

 

RELATING TO RURAL PHYSICIANS TAX CREDIT.

 

 

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

 


SECTION 1. The legislature finds that a problematic medical environment has resulted in scores of physicians leaving the state. Rural areas, especially on the neighbor islands, have seen an increasing exodus of much-needed trained physicians, who for various reasons have found it more suitable to leave the state for other parts of the country.

This Act addresses this problem, in part, by providing a tax incentive to encourage physicians to establish their practice in rural communities.

SECTION 2. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"235-    Rural physicians; tax credit. (a) There shall be allowed to each individual taxpayer who is a qualified physician and who is not claimed, or is not otherwise eligible to be claimed, as a dependent by another taxpayer for federal or state income tax purposes, a rural physicians tax credit that shall be deductible from the taxpayer's net income tax liability imposed by this chapter for the taxable year in which the tax credit is properly claimed.

As used in this section:

"Qualified physician" means a physician licensed under chapter 453 who moves to, and establishes residence and practices medicine in, a rural area of the state.

"Rural area" means an area designated by the department of health that is in critical need of physicians.

(b) To qualify for the tax credit, the taxpayer shall be in compliance with all applicable federal, state, and county statutes, rules, and regulations.

(c) The tax credit shall be equal to the following sliding scale of the number of years a qualified physician practices in a rural area and a correlating percentage of the qualified physician's insurance premium cost that qualifies for the tax credit:

Years of continuous medical Percentage of insurance

practice in a rural area: premium (tax credit):

(1) One year Ten per cent;

(2) Two years Twenty per cent;

(3) Three years Thirty per cent;

(4) Four years Forty per cent;

(5) Five years Fifty per cent;

(6) Six years ` Sixty per cent; and

(7) Seven years Seventy per cent;

provided that the calculation of the years of continuous medical practice shall commence in the year following December 31, 2008; and provided further that the tax credit may be claimed only once per taxable year.

(d) If the tax credit under this section exceeds the taxpayer's net income tax liability, the amount of the excess tax credit may be claimed in subsequent years until exhausted.

(e) Every claim, including amended claims, for the tax credit under this section shall be filed on or before the end of the twelfth month following the close of the taxable year for which the tax credit may be claimed. Failure to meet the filing requirements of this subsection shall constitute a waiver of the right to claim the tax credit.

(f) The director of taxation:

(1) Shall prepare forms as may be necessary to claim a tax credit under this section;

(2) May require proof of the claim for the tax credit; and

(3) May adopt rules pursuant to chapter 91 to effectuate the purposes of this section."

SECTION 3. New statutory material is underscored.

SECTION 4. This Act shall take effect upon its approval and apply to taxable years beginning after December 31, 2008.