Report Title:

Tax Credit; Physicians and Dentists; Medically Underserved Areas and Medical Specialties

Description:

Provides income tax credits for a percentage of medical malpractice premiums of physicians and dentists practicing in medically or dentally underserved areas, or of a physician specializing in certain increasingly unavailable disciplines who practices in a medically underserved area. (HB230 HD1)

HOUSE OF REPRESENTATIVES

H.B. NO.

230

TWENTY-THIRD LEGISLATURE, 2005

H.D. 1

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO INCOME TAXATION.

 

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

SECTION 1. The legislature finds that there is a serious crisis in the provision of medical and dental services to the poor and uninsured in medically or dentally underserved areas of the state, particularly in the rural areas. A spiraling downward trend has also been recognized in the availability to the general public of certain medical specialty disciplines. The legislature further finds that financial incentives need to be extended to physicians and dentists to treat the poor and medically uninsured in those areas, and to increase the number of essential specialty disciplines in all areas.

The legislature further finds that medical and dental malpractice insurance premiums are reaching levels that discourage the practice of medicine and dentistry in these underserved areas and specialty disciplines, and that an ideal incentive for physicians and dentists to treat the poor and uninsured and go into specialty disciplines is to provide them with an income tax credit for a portion of the amounts paid for medical and dental malpractice insurance premiums.

The purpose of this Act is to create an income tax credit for physicians and dentists who practice in medically or dentally underserved areas of the State.

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

"§235-A Tax credits for physicians and surgeons; medical and dental underserved areas. (a) There shall be allowed to each eligible taxpayer subject to the taxes imposed by this chapter, an income tax credit that shall be deductible from the eligible taxpayer's net income tax liability, if any, imposed by this chapter for the taxable year in which the credit is properly claimed.

(b) The tax credit shall be in an amount equal to        per cent of the amount of medical or dental malpractice insurance premiums paid by the eligible taxpayer for the taxable year in which the credit is properly claimed.

(c) If the tax credit exceeds the eligible taxpayer's income tax liability, the excess of the credits over liability shall be refunded to the taxpayer; provided that the tax credit properly claimed by an eligible taxpayer who has no income tax liability shall be paid to the taxpayer; provided further that no refunds or payments on account of the tax credit allowed by this section shall be made for amounts less than $1.

(d) The director of taxation shall prepare forms as may be necessary to claim a credit under this section, may require proof of the claim for the tax credit, and may adopt rules pursuant to chapter 91 to implement this section.

(e) All of the provisions relating to assessments and refunds under this chapter and under section 231-23(c)(1) shall apply to the tax credit under this section.

(f) All claims including any amended claims for a tax credit under this section shall be filed on or before the end of the twelfth month following the close of the taxable years for which the credit may be claimed. Failure to comply with the foregoing provisions shall constitute a waiver of the right to claim the credit.

(g) As used in this section:

"Eligible taxpayer" means a taxpayer who in the year for which the credit is claimed:

(1) Is licensed to practice medicine under chapter 453 and practices medicine in a medically underserved area, as designated by the department of human services by rule; or

(2) Is licensed to practice dentistry under chapter 448 and practices dentistry in a dentally underserved area, as designated by the department of human services by rule; and

(3) Derives not less than ten per cent of income taxable under this chapter from medicaid or QUEST reimbursement.

(h) No taxpayer that claims a credit under this section shall claim a credit under section 235-B.

§235-B Tax credits for physicians and surgeons; medical specialty disciplines. (a) There shall be allowed to each eligible taxpayer subject to the taxes imposed by this chapter, an income tax credit that shall be deductible from the eligible taxpayer's net income tax liability, if any, imposed by this chapter for the taxable year in which the credit is properly claimed.

(b) The tax credit shall be in an amount equal to        per cent of the amount of medical malpractice insurance premiums paid by the eligible taxpayer for the taxable year in which the credit is properly claimed.

(c) If the tax credit exceeds the eligible taxpayer's income tax liability, the excess of the credits over liability shall be refunded to the taxpayer; provided that the tax credit properly claimed by an eligible taxpayer who has no income tax liability shall be paid to the taxpayer; provided further that no refunds or payments on account of the tax credit allowed by this section shall be made for amounts less than $1.

(d) The director of taxation shall prepare forms as may be necessary to claim a credit under this section, may require proof of the claim for the tax credit, and may adopt rules pursuant to chapter 91 to implement this section.

(e) All of the provisions relating to assessments and refunds under this chapter and under section 231-23(c)(1) shall apply to the tax credit under this section.

(f) All claims including any amended claims for a tax credit under this section shall be filed on or before the end of the twelfth month following the close of the taxable years for which the credit may be claimed. Failure to comply with the foregoing provisions shall constitute a waiver of the right to claim the credit.

(g) As used in this section:

"Eligible taxpayer" means a taxpayer who in the year for which the credit is claimed:

(1) Is licensed to practice medicine under chapter 453    , is board certified or otherwise credentialed to practice one of the following disciplines: anesthesiology, gastroenterology, general surgery, neurosurgery, obstetrics, orthopedic surgery, or trauma surgery, and is actively practicing the discipline in a medically underserved area, as designated by the department of human services by rule; and

(2) Derives not less than ten per cent of income taxable under this chapter from medicaid or QUEST reimbursement.

(h) No taxpayer that claims a credit under this section shall claim a credit under section 235-A."

SECTION 3. In codifying the new sections added by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

SECTION 4. New statutory material is underscored.

SECTION 5. This Act, upon its approval, shall apply to taxable years beginning after December 31, 2004.