2015 -- H 6134

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2015

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A N   A C T

RELATING TO TAXATION - FACILITY AND IMAGING SURCHARGES

     Introduced By: Representatives Naughton, Shekarchi, Ajello, Regunberg, and Giarrusso

     Date Introduced: April 30, 2015

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Sections 44-64-2 and 44-64-3 of the General Laws in Chapter 44-64

entitled "The Outpatient Health Care Facility Surcharge" are hereby amended to read as follows:

     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 amount received related to patient

care professional services less (i) charges attributable to charity care, (ii) bad debt expenses, and

(iii) contractual allowances, and (iv) charges attributable to medical supplies used within the

outpatient care facility.

      (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. as follows:

     (1) Effective July 1, 2015, a surcharge at a rate of one and one-half percent (1.5%) shall

be imposed upon the net patient services revenue received each month by every outpatient

healthcare 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.

     (2) Effective July 1, 2016, a surcharge at a rate of one percent (1.0%) shall be imposed

upon the net patient services revenue received each month by every outpatient healthcare 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.

     (3) Effective July 1, 2017, a surcharge at a rate of one-half percent (0.5%) shall be

imposed upon the net patient services revenue received each month by every outpatient

healthcare 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.

     (4) Effective July 1, 2018, the surcharge imposed upon the net patient service revenue

under this chapter is hereby repealed.

     SECTION 2. Sections 44-65-2 and 44-65-3 of the General Laws in Chapter 44-65

entitled "Imaging Services Surcharge" are hereby amended to read as follows:

     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.

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      (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

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 amount received related to patient

care professional services less (i) charges attributable to charity care, (ii) bad debt expenses, and

(iii) contractual allowances, and (iv) charges attributable to medical supplies, including contrast

media and radiopharmaceuticals, used for imaging devices.

      (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) 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. as follows:

     (1) Effective July 1, 2015, a surcharge shall be imposed upon the net patient revenue

received by every provider in each month at a rate of one and one-half percent (1.5%). Every

provider shall pay the monthly surcharge no later than the twenty-fifth (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.

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     (2) Effective July 1, 2016, a surcharge shall be imposed upon the net patient revenue

received by every provider in each month at a rate of one percent (1.0%). Every provider shall

pay the monthly surcharge no later than the twenty-fifth (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.

     (3) Effective July 1, 2017, a surcharge shall be imposed upon the net patient revenue

received by every provider in each month at a rate of one-half percent (0.5%). Every provider

shall pay the monthly surcharge no later than the twenty-fifth (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.

     (4) Effective July 1, 2018, the surcharge imposed upon the net patient service revenue

under this chapter is hereby repealed.

     (b) In order to stimulate job growth and advancement, the following credits may be

applied against the remaining amount of the surcharge until its elimination on July 1, 2018:

     (1) For each new position, a job creation credit of fifty percent (50%) of the employee's

first year wages up to forty thousand dollars ($40,000) per employee. Employees must be

employed for a minimum of fifty-two (52) consecutive calendar weeks and a minimum of one

thousand forty (1,040) hours. The maximum credit shall be twenty thousand dollars ($20,000) per

employee.

     (2) A job advancement credit of fifty percent (50%) of an employee's wage increase

above two percent (2%) up to one thousand dollars ($1,000) per employee compared to the base

employment wage as of July 1, 2015. The maximum credit shall be one thousand dollars ($1,000)

per employee.

     (3) A job training credit of twenty-five percent (25%) for advanced medical imaging

education and training for staff and providers above baseline levels for the fiscal year ending June

30, 2015. Maximum credit of one thousand five hundred dollars ($1,500) per employee.

     (4) A new equipment credit of ten percent (10%) for depreciable tangible personal

property and other tangible property, including leasehold improvements, buildings and structural

components of buildings used in the provision of updating diagnostic imaging services to new

imaging technology.

     SECTION 3. This act shall take effect on July 1, 2015.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO TAXATION - FACILITY AND IMAGING SURCHARGES

***

     This act would exempt medical supplies from the outpatient healthcare facility surcharge

and the imaging services surcharge and would reduce the surcharge from two percent (2%) to one

and one-half percent (1.5%) in the first year, then to one percent (1%) in the second year, then to

one-half of one percent (0.5%) in the third year thereafter following the act's effective date and

repealing the surcharge on July 1, 2018. The act would also make available certain tax credits for

new hires, promotions, and training.

     This act would take effect on July 1, 2015.

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