Hawaii-2010-SB2203-Amended

SECTION 1. Chapter 209E, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:

"Part . Health Care Enterprise zones

§209E-A Definitions. As used in this part, unless the context otherwise requires:

"Department" means the department of health.

"Director" means the director of health.

"Health care enterprise zone" means an area that is designated by the director of health, with concurrence from any affected counties, and is a state designated medically underserved area.

"Primary care" means the practice of family medicine, general internal medicine, general pediatrics, general obstetrics, gynecology, and any other areas of medicine that the director of health may define as primary care. Primary care also includes the practice of general dentistry and pedodontics, long-term care, and the professions of nurse practitioner, certified nurse midwife, and physician assistant.

"Qualified practice" means a health care practice at which fifty per cent or more of the total amount received for services at that practice for the taxable year are qualified receipts and fifty per cent or more of the patients whose services are compensated by qualified receipts reside in a designated health care enterprise zone.

"Qualified receipts" means amounts received for services from the medicaid program, including amounts received from managed care organizations under contract with the medicaid program, for providing health care services to eligible program recipients.

§209E-B Health care enterprise zones; established. The director of health may designate, with the concurrence of the affected county or counties, geographically describable areas within the State that the director determines to be a medically underserved area as a heath care enterprise zone; provided that any county with a resident population of less than 500,000 shall automatically be deemed a health care enterprise zone.

§209E-C Tax deduction for qualified receipts. A taxpayer who is providing primary care as defined in this part at:

(1) A practice that is located in a health care enterprise zone as defined in this part; or

(2) A qualified practice that is located within five miles of a health care enterprise zone as defined in this part;

shall be allowed to deduct from the taxpayer's gross income in a taxable year an amount equal to that proportion of the taxpayer's net income deriving from that practice for the taxable year that the qualified receipts of that practice for the taxable year bear to the total amount received for services at that practice for the taxable year.

§209E-D Low-interest loans for medical offices in health care enterprise zones. (a) In consultation with the director of health, the director of business, economic development, and tourism shall establish and administer a program that makes low-interest loans for the purposes of constructing, renovating, or purchasing:

(1) Medical offices in health care enterprise zones;

(2) Offices of a qualified practice that is located within five miles of a health care enterprise zone; and

(3) Medical equipment for use by primary care providers at practices located in health care enterprise zones or at qualified practices that are located within five miles of a health care enterprise zone.

(b) The director of business, economic development, and tourism shall adopt rules in accordance with chapter 91, necessary to effectuate the purposes of this section.

§209E-E State general excise tax exemptions. The department of business, economic development, and tourism, in coordination with the department of health, shall certify annually to the department of taxation that any primary care practice, as defined in this part, that is located in a health care enterprise zone is exempt from the payment of general excise taxes on the gross proceeds from any business activity that is directly related to that primary care practice. The exemption shall extend for a period not to exceed seven years.

§209E-F Property tax exemption; tenant rebate. (a) A county that has within its boundaries a health care enterprise zone, as defined in this part, may propose local incentives that provide for an exemption or reduction of real property taxes of that portion of a structure or building that is used to house a medical or dental primary care practice as defined in this part and that is located in that designated area.

(b) The exemption or reduction in real property taxes shall be in effect for tax years that are within the period of designation as a health care enterprise zone and shall be contingent upon an annual application filed by the property owner with, and approved by, the county in which the application was filed.

(c) Upon the granting of an exemption or reduction of real property taxes pursuant to this section, an owner of the building or structure granted the exemption or reduction shall rebate to a tenant engaged in the medical or dental primary care practice an amount equal to the exemption, which may be a lump sum or rebated through discounted rental payments.

(d) The tenant engaged in the medical or dental primary care practice or the owner of the building or structure granted the exemption or reduction shall annually submit proof to the county in which the exemption or reduction was granted that the amount of the exemption was rebated to the eligible tenant. If proof satisfactory to the county is not provided in the manner that the each county shall establish, the exemption or reduction shall not be allowed for the tax year and the owner of the property shall refund the amount of the exemption or reduction for that tax year to the county."

SECTION 2. Chapter 209E, Hawaii Revised Statutes, is amended by designating sections 209E-1 to 209E-14 as part I, entitled:

"Part I. state Enterprise zones"

SECTION 3. New statutory material is underscored.

SECTION 4. This Act shall take effect on July 1, 2050.

THE SENATE	S.B. NO.	2203
TWENTY-FIFTH LEGISLATURE, 2010		S.D. 1
STATE OF HAWAII