2014 -- H 7428

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LC003559

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2014

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A N   A C T

RELATING TO TAXATION - FACILITY AND IMAGING SURCHARGES

     Introduced By: Representatives Naughton, E Coderre, McNamara, Ferri, and Giarrusso

     Date Introduced: February 12, 2014

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

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

Facility Surcharge" is hereby repealed in its entirety.

CHAPTER 44-64

The Outpatient Health Care Facility Surcharge

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

Facility Surcharge Act."

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

following meaning:

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

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

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

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

patient revenue."

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

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

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

stock association, and the legal successor thereof.

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

operator, subject to a surcharge under this chapter.

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

to this chapter.

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

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

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

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

chapter 17 of title 23.

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

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

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

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

other authorized fees that have been assessed upon outpatient facilities.

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

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

administrator.

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

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

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

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

administrator shall refund or credit the overpayment to the provider.

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

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

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

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

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

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

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

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

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

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

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

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

provider.

     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

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

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

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

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

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

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

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

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

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

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

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

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

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

the date of overpayment.

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

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

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

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

the hearing and shall so notify the provider.

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

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

together with any penalty or interest thereon.

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

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

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

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

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

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

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

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

laws, as amended.

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

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

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chapter;

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

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

been completed; and

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

his authorized agents at reasonable times during regular business hours.

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

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

the general fund.

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

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

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

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

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

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

purposes of this chapter.

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

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

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

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

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

is hereby repealed in its entirety.

CHAPTER 44-65

Imaging Services Surcharge

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

Act."

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

following meaning:

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

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

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

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

patient revenue."

      (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

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

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

procedures.

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

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

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

stock association, and the legal successor thereof.

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

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

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

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

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

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

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

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

chapter.

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

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

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

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

other fees or assessments upon the provider allowable by law.

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

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

administrator.

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

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

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

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

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

the provider.

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

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

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

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

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

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

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

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

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

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

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

the surcharge due from the provider.

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

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

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

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

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

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

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

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

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

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

collection of taxes in this title.

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

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

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

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

overpayment.

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

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

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

notify the provider.

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

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

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

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

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

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

thereon.

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

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

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

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

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

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

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

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

as amended.

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

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

chapter.

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

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

finally determined.

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

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

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

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

deposited to the general fund.

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

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

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

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

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

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

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

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

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

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.

     SECTION 3. This act shall take effect upon passage.

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LC003559

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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 tax surcharges on Outpatient Healthcare Facility and medical

imaging services.

     This act would take effect upon passage.

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LC003559

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