Health Care; Loans; Stipends; Enterprise Zones
Establishes the Hawaii Health Corps Program to provide student loans and physician and dentist stipends, and makes the enterprise zone business tax credit and general excise tax exemption available to physicians and dentists who practice in those enterprise zones. Requires participants in the Hawaii Health Corps Program to serve as first responders in times of civil defense or other emergencies declared by the governor.
HOUSE OF REPRESENTATIVES
TWENTY-FOURTH LEGISLATURE, 2008
STATE OF HAWAII
A BILL FOR AN ACT
RELATING TO HEALTH CARE.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
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 forgiveness 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 students to enter the medical profession and 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.
SECTION 2. The purpose of part II of this Act is to establish the Hawaii health corps that will provide:
(1) Loan forgiveness to students at the University of Hawaii John A. Burns School of Medicine who agree to work at least five years as a physician 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:
§ -1 Definitions. As used in this chapter, unless the context otherwise requires:
"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 administered by the University of Hawaii John A. Burns School of Medicine that leads to eligibility for a license under chapter 453.
"Enrollment requirement" means the requirement that the recipient of a program loan enroll in and complete an eligible education and training program.
"Health professional shortage area" means 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, dental care, or mental health care providers, including any rural area of the state and areas served by community health centers.
"Licensure requirement" means the requirement that the recipient of a health corps program loan take and pass any examinations required for licensure as a physician, and become licensed under chapter 453.
"Physician" means a person licensed under chapter 453.
"Loan forgiveness" means the waiver of repayment of a program loan, in whole or in part.
"Program" means the Hawaii health corps program.
"Service obligation" means the 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 forgiveness or a physician or dentist stipend from the program.
"Sponsoring community" means a hospital or a county government that serves to identify prospective eligible students for the program.
§ -2 Hawaii health corps program established. The Hawaii health corps program is established to encourage physicians and dentists to serve in areas of the state where there is a shortage of these health care providers or relatively high numbers of uninsured patients. The program shall be administered by the department. In administering this program, the department shall:
(1) Adopt rules and develop guidelines to administer the program;
(2) Identify and designate health professional shortage areas;
(3) Identify and approve eligible education and training programs;
(4) Establish criteria for the selection, and select eligible students to participate in the loan forgiveness portion of the program;
(5) Establish criteria for the selection, and select physicians and dentists to participate in the stipend portion of the program;
(6) Define and determine compliance with the program enrollment requirement, licensure requirement, and service obligations;
(7) Collect and manage repayments from loan recipients who do not meet their enrollment requirement, licensure requirement, or service obligations under the program;
(8) Publicize the program, particularly to maximize participation by individuals who live in health professional shortage areas;
(9) Solicit and accept grants and donations from public and private sources for the program; and
(10) Establish criteria and procedures for calling program participants into service during a civil defense or other emergency.
§ -3 Hawaii rural physician loan program. (a) There is created the Hawaii rural physician loan program to be administered by the department in partnership with a financial institution whose operations are principally conducted in Hawaii. The program shall provide loans to not more than twenty eligible students per year who agree to:
(1) Enroll in and complete an eligible education and training program;
(2) Take and pass any examinations required for licensure under section 453-4 and become licensed under chapter 453;
(3) Serve as a physician in a health professional shortage area of the state for five consecutive years commencing not later than six months after completing the residency portion of the eligible education and training program; and
(4) At any time during the five years of service under paragraph (3), serve as a physician first responder during a period declared by the governor to be an emergency.
(b) Loans shall be made to cover the cost of tuition necessary to complete an eligible education and training program, but shall not exceed five years of tuition.
Eligibility for loans shall be determined by the department on a competitive basis. Preference for loans shall be given to students who reside in or were residents of a health professional shortage area, and students seeking admission to an eligible education and training program who are recommended by a sponsoring community located in a health professional shortage area.
(c) If the loan recipient has satisfied the recipient's enrollment requirement, licensure requirement, and service obligation, the total amount of the recipient's loan and interest shall be waived.
(d) If a loan recipient fails to satisfy the recipient's enrollment requirement, licensure requirement, or service obligation, then the recipient shall repay three times the amount of the loan in periodic installments within a period not to exceed seven years, commencing three months after the loan recipient fails to honor the enrollment requirement, licensure requirement, or service obligation. The department may charge late fees and all other reasonable costs for the collection of delinquent loans.
(e) In accordance with chapter 103D, the department may enter into written contracts with collection agencies for the purpose of collecting delinquent loans. 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 for the collection of delinquent loans 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.
(f) Liability for repayment of a loan may be waived or the conditions of repayment adjusted for loan recipients who fail to meet their service obligation for good cause. Liability for repayment of a loan shall be canceled upon the death or permanent 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 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 a critical action relief lineup to serve in areas of the state and in a capacity determined by the director.
§ -6 Criteria for selecting loan and stipend recipients. The department shall establish a planning committee to assist the department in developing criteria for the selection of loan 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 Technical assistance for potential sponsoring communities. The department may provide technical assistance to allow county governments or hospitals serving rural communities to:
(1) Become sponsoring communities for the purpose of identifying prospective students for the program;
(2) Assist prospective students with applying for admission into an eligible education and training program;
(3) Enter into formal agreements with prospective students to provide licensed health care services in the sponsoring community;
(4) Form agreements to share physicians and dentists with other entities serving rural communities; and
(5) Fulfill any matching funds requirements.
§ -8 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.
§ -9 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, loan payments, 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, 2010.
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.
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
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 the business either meets the requirements of subsection (a)(1) and (2) or (b)(1) and (2).
(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.
SECTION 8. There is appropriated out of the general revenues of the State of Hawaii the sum of $2,000,000 or so much thereof as may be necessary for fiscal year 2008-2009 for the Hawaii health corps program.
The sum appropriated shall be expended by the department of business, economic development, and tourism 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 $100,000 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.
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, 2008.