2012 -- S 2207

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LC00838

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2012

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A N A C T

RELATING TO TAXATION - FACILITY AND IMAGING SURCHARGES

     Introduced By: Senators Gallo, and Lanzi

     Date Introduced: January 24, 2012

     Referred To: Senate Health & Human Services

It is enacted by the General Assembly as follows:

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     SECTION 1. Chapter 44-64 of the General Laws entitled "The Outpatient Health Care

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Facility Surcharge" is hereby repealed in its entirety.

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     CHAPTER 44-64

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The Outpatient Health Care Facility Surcharge

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     44-64-1. Short title. -- This chapter shall be known as "The Outpatient Health Care

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Facility Surcharge Act."

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     44-64-2. Definitions. -- The following words and phrases as used in this chapter have the

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following meaning:

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      (1) "Administrator" means the tax administrator within the department of revenue.

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      (2) "Gross patient revenue" means the gross amount received on a cash basis by the

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provider from all patient care and other gross operating income. However, charitable

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contributions, fund raising proceeds, and endowment support shall not be considered "gross

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patient revenue."

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      (3) "Net patient services revenue" means the charges related to patient care services less

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(i) charges attributable to charity care, (ii) bad debt expenses, and (iii) contractual allowances.

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      (4) "Person" means any individual, corporation, company, association, partnership, joint

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stock association, and the legal successor thereof.

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      (5) "Provider" means a licensed facility or operator, including a government facility or

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operator, subject to a surcharge under this chapter.

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      (6) "Surcharge" means the assessment that is imposed upon net patient revenue pursuant

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to this chapter.

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     44-64-3. Imposition of surcharge -- Outpatient health care facility. -- (a) For the

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purposes of this section, an "outpatient health care facility" means a person or governmental unit

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that is licensed to establish, maintain, and operate a free-standing ambulatory surgery center or a

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physician ambulatory surgery center or a podiatry ambulatory surgery center, in accordance with

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chapter 17 of title 23.

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      (b) A surcharge at a rate of two percent (2.0%) shall be imposed upon the net patient

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services revenue received each month by every outpatient health care facility. Every provider

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shall pay the monthly surcharge no later than the twenty-fifth (25th) day of the month following

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the month that the gross patient revenue is received. This surcharge shall be in addition to any

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other authorized fees that have been assessed upon outpatient facilities.

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     44-64-4. Returns. -- (a) Every provider shall, on or before the twenty-fifth (25th) day of

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the month following the month that the gross patient revenue is received, make a return to the tax

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administrator.

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      (b) The tax administrator is authorized to adopt rules relative to the form of the return

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and the data it must contain for the correct computation of gross patient revenue and the

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surcharge. All returns shall be signed by the provider or its authorized representative, subject to

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the penalties of perjury. If a return shows an overpayment of the surcharge due, the tax

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administrator shall refund or credit the overpayment to the provider.

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      (c) The tax administrator, for good cause shown, may extend the time within which a

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provider is required to file a return. If the return is filed during the period of extension, no penalty

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or late filing charge may be imposed for failure to file the return at the time required by this

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chapter, but the provider shall be liable for any interest as prescribed in this chapter. Failure to

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file the return during the period for the extension shall make the extension null and void.

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     44-64-5. Set-off for delinquent payment of surcharge. -- If a provider shall fail to pay a

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surcharge within thirty (30) days of its due date, the tax administrator may request any agency of

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state government to set off the amount of the delinquency against any payment they might be due

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the provider from the agency and to remit any such payment to the tax administrator. Upon

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receipt of a request for set-off from the tax administrator, any agency of state government is

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authorized and empowered to set off the amount of any delinquency against any payment that is

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due the provider. The amount of set-off shall be credited against the surcharge due from the

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provider.

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     44-64-6. Surcharge on available information -- Interest on delinquencies -- Penalties

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-- Collection powers. -- If any provider shall fail, within the time required by this chapter, to file

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a return, or shall file an insufficient or incorrect return, or shall not pay the surcharge imposed by

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this chapter when it is due, the tax administrator shall make an assessment based upon

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information that may be available, which assessment shall be payable upon demand and shall

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bear interest from the date when the surcharge should have been paid at the annual rate set forth

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in section 44-1-7 of the Rhode Island general laws, as amended. If any part of the surcharge is

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caused by the negligence or intentional disregard of the provisions of this chapter, a penalty of ten

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percent (10%) of the amount of the determination shall be added to the surcharge. The tax

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administrator shall collect the surcharge with interest in the same manner and with the same

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powers as are prescribed for collection of taxes in this title.

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     44-64-7. Claims for refund -- Hearing upon denial. -- (a) Any provider, subject to the

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provisions of this chapter, may file a claim for refund with the tax administrator at any time

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within two (2) years after the surcharge has been paid. If the tax administrator shall determine

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that the surcharge has been overpaid, the tax administrator shall make a refund with interest from

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the date of overpayment.

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      (b) Any provider aggrieved by an action of the tax administrator in determining the

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amount of any surcharge or penalty imposed under the provisions of this chapter may, within

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thirty (30) days after the notice of the action was mailed, apply to the tax administrator, for a

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hearing relative to the surcharge or penalty. The tax administrator shall fix a time and place for

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the hearing and shall so notify the provider.

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     44-64-8. Hearing by tax administrator on application. -- Following hearing, if the tax

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administrator upholds the assessment of the surcharge, the amount owed shall be assessed

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together with any penalty or interest thereon.

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     44-64-9. Appeals. -- Appeals from administrative orders or decisions made pursuant to

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any provisions of this chapter shall be to the sixth division district court pursuant to chapter 8 of

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title 8 of the Rhode Island general laws, as amended. The provider's right to appeal under this

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section shall be expressly made conditional upon prepayment of all surcharges, interest, and

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penalties, unless the provider moves for and is granted an exemption from the prepayment

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requirement, pursuant to section 8-8-26 of the Rhode Island general laws, as amended. Following

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the appeal, if the court determines that the provider is entitled to a refund, the provider shall also

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be paid interest on the refund at the rate provided in section 44-1-7.1 of the Rhode Island general

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laws, as amended.

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     44-64-10. Provider records. -- Every provider shall:

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      (1) Keep records as may be necessary to determine the amount of its liability under this

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chapter;

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      (2) Preserve those records for the period of three (3) years following the date of filing of

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any return required by this chapter, or until any litigation or prosecution under this chapter has

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been completed; and

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      (3) Make those records available for inspection upon demand by the tax administrator or

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his authorized agents at reasonable times during regular business hours.

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     44-64-11. Method of payment and deposit of surcharge. -- (a) Payments required by

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this chapter may be made by electronic transfer of monies to the general treasurer for deposit in

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the general fund.

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      (b) The general treasurer is authorized to establish necessary accounts and to take all

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steps necessary to facilitate the electronic transfer of monies. The general treasurer shall provide

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the tax administrator a record of any such monies transferred and deposited.

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     44-64-12. Rules and regulations. -- The tax administrator is authorized to promulgate all

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necessary rules, regulations, and procedures, not inconsistent with state law and fiscal procedures,

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for the proper administration of this chapter and in order to carry out the provisions, policy, and

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purposes of this chapter.

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     44-64-13. Severability. -- If any provision of this chapter or the application of this

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chapter to any person or circumstances is held invalid, that invalidity shall not affect other

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provisions or applications of the chapter that can be given effect without the invalid provision or

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application, and to this end the provisions of this chapter are declared to be severable.

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     SECTION 2. Chapter 44-65 of the General Laws entitled "Imaging Services Surcharge"

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is hereby repealed in its entirety.

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     CHAPTER 44-65

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Imaging Services Surcharge

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     44-65-1. Short title. -- This chapter shall be known as "The Imaging Services Surcharge

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Act."

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     44-65-2. Definitions. -- The following words and phrases as used in this chapter have the

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following meaning:

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      (1) "Administrator" means the tax administrator within the department of administration.

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      (2) "Gross patient revenue" means the gross amount received on a cash basis by a

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provider from all income derived from the provision of imaging services to patients. Charitable

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contributions, fundraising proceeds, and endowment support shall not be considered as "gross

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patient revenue."

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      (3) "Imaging services" means and includes all the professional and technical components

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of x-ray, ultrasound (including echocardiography), computed tomography (CT), magnetic

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resonance imaging (MRI), positron emission tomography (PET), positron emission

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tomography/computed tomography (PET/CT), general nuclear medicine, and bone densitometry

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procedures.

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      (4) "Net patient services revenue" means the charges related to patient care services less

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(i) charges attributable to charity care, (ii) bad debt expenses, and (iii) contractual allowances.

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      (5) "Person" means any individual, corporation, company, association, partnership, joint

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stock association, and the legal successor thereof.

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      (6) "Provider" means any person who furnishes imaging services for the purposes of

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patient diagnosis, assessment or treatment, excluding any person licensed as a hospital or a

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rehabilitation hospital center or a not-for-profit organization ambulatory care facility, pursuant to

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the provisions of chapter 17 of title 23 of the Rhode Island general laws, as amended or not

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performing more than two hundred (200) radiological procedures per month. Further, the term

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"provider" shall not apply to any person subject to the provisions of chapter 64 of title 44 or to

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any person licensed in the state of Rhode Island as a dentist or a podiatrist or a veterinarian.

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      (7) "Surcharge" means the assessment imposed upon net patient revenue pursuant to this

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chapter.

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     44-65-3. Imposition of surcharge. -- A surcharge shall be imposed upon the net patient

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revenue received by every provider in each month at a rate of two percent (2.0%). Every provider

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shall pay the monthly surcharge no later than the twenty-fifty (25th) day of each month following

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the month of receipt of net patient services revenue. This surcharge shall be in addition to any

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other fees or assessments upon the provider allowable by law.

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     44-65-4. Returns. -- (a) Every provider shall on or before the twenty-fifty (25th) day of

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the month following the month of receipt of gross patient revenue make a return to the tax

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administrator.

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      (b) The tax administrator is authorized to adopt rules, pursuant to this chapter, relative to

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the form of the return and the data that it must contain for the correct computation of gross patient

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revenue and the surcharge upon the amount. All returns shall be signed by the provider or by its

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authorized representative, subject to the pains and penalties of perjury. If a return shows an

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overpayment of the surcharge due, the tax administrator shall refund or credit the overpayment to

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the provider.

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      (c) The tax administrator, for good cause shown, may extend the time within which a

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provider is required to file a return, and if the return is filed during the period of extension no

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penalty or late filing charge may be imposed for failure to file the return at the time required by

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this chapter, but the provider shall be liable for interest as prescribed in this chapter. Failure to

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file the return during the period for the extension shall void the extension.

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     44-65-5. Set-off for delinquent payment of surcharge. -- If a provider shall fail to pay a

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surcharge within thirty (30) days of its due date, the tax administrator may request any agency of

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state government making payments to the provider to set-off the amount of the delinquency

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against any payment due the provider from the agency of state government and remit the sum to

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the tax administrator. Upon receipt of the set-off request from the tax administrator, any agency

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of state government is authorized and empowered to set-off the amount of the delinquency

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against any payment or amounts due the provider. The amount of set-off shall be credited against

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the surcharge due from the provider.

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     44-65-6. Surcharge on available information -- Interest on delinquencies -- Penalties

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-- Collection powers. -- If any provider shall fail to file a return within the time required by this

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chapter, or shall file an insufficient or incorrect return, or shall not pay the surcharge imposed by

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this chapter when it is due, the tax administrator shall assess upon the information as may be

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available, which shall be payable upon demand and shall bear interest at the annual rate provided

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by section 44-1-7 of the Rhode Island general laws, as amended, from the date when the

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surcharge should have been paid. If any part of the surcharge made is due to negligence or

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intentional disregard of the provisions of this chapter, a penalty of ten percent (10%) of the

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amount of the determination shall be added to the tax. The tax administrator shall collect the

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surcharge with interest in the same manner and with the same powers as are prescribed for

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collection of taxes in this title.

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     44-65-7. Claims for refund -- Hearing upon denial. -- (a) Any provider, subject to the

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provisions of this chapter, may file a claim for refund with the tax administrator at any time

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within two (2) years after the surcharge has been paid. If the tax administrator shall determine

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that the surcharge has been overpaid, he or she shall make a refund with interest from the date of

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overpayment.

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      (b) Any provider whose claim for refund has been denied may, within thirty (30) days

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from the date of the mailing by the administrator of the notice of the decision, request a hearing

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and the administrator shall, as soon as practicable, set a time and place for the hearing and shall

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notify the provider.

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     44-65-8. Hearing by tax administrator on application. -- Any provider aggrieved by

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the action of the tax administrator in determining the amount of any surcharge or penalty imposed

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under the provisions of this chapter may apply to the tax administrator, within thirty (30) days

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after the notice of the action is mailed to it, for a hearing relative to the surcharge or penalty. The

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tax administrator shall fix a time and place for the hearing and shall so notify the provider. Upon

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the hearing the tax administrator shall correct manifest errors, if any, disclosed at the hearing and

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thereupon assess and collect the amount lawfully due together with any penalty or interest

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thereon.

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     44-65-9. Appeals. -- Appeals from administrative orders or decisions made pursuant to

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any provisions of this chapter shall be to the sixth division district court pursuant to chapter 8 of

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title 8 of the Rhode Island general laws, as amended. The provider's right to appeal under this

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section shall be expressly made conditional upon prepayment of all surcharges, interest, and

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penalties unless the provider moves for and is granted an exemption from the prepayment

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requirement pursuant to section 8-8-26 of the Rhode Island general laws, as amended. If the

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court, after appeal, holds that the provider is entitled to a refund, the provider shall also be paid

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interest on the amount at the rate provided in section 44-1-7.1 of the Rhode Island general laws,

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as amended.

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     44-65-10. Provider records. -- Every provider shall:

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      (1) Keep records as may be necessary to determine the amount of its liability under this

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chapter.

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      (2) Preserve those records for the period of three (3) years following the date of filing of

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any return required by this chapter, or until any litigation or prosecution under this chapter is

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finally determined.

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      (3) Make those records available for inspection by the administrator or his/her authorized

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agents, upon demand, at reasonable times during regular business hours.

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     44-65-11. Method of payment and deposit of surcharge. -- (a) The payments required

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by this chapter may be made by electronic transfer of monies to the general treasurer and

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deposited to the general fund.

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      (b) The general treasurer is authorized to establish an account or accounts and to take all

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steps necessary to facilitate the electronic transfer of monies. The general treasurer shall provide

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the tax administrator a record of any monies transferred and deposited.

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     44-65-12. Rules and regulations. -- The tax administrator is authorized to make and

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promulgate rules, regulations, and procedures not inconsistent with state law and fiscal

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procedures as he or she deems necessary for the proper administration of this chapter and to carry

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out the provisions, policies, and purposes of this chapter.

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     44-65-13. Severability. -- If any provision of this chapter or the application of this

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chapter to any person or circumstances is held invalid, that invalidity shall not affect other

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provisions or applications of the chapter that can be given effect without the invalid provision or

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application, and to this end the provisions of this chapter are declared to be severable.

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     SECTION 3. This act shall take effect upon passage.

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LC00838

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO TAXATION - FACILITY AND IMAGING SURCHARGES

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     This act would repeal chapter 44-64 entitled “The Outpatient Health Care Facility

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Surcharge” and chapter 44-65 entitled “Imaging Services Surcharge”.

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     This act would take effect upon passage.

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LC00838

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