SB277INTRODUCED
Page 0
MP57H1-1
By Senators Stewart, Melson, Sessions, Williams, Hovey,
Kelley, Figures, Weaver, Beasley, Coleman, Carnley, Hatcher,
Livingston, Jones, Coleman-Madison, Price, Gudger, Smitherman
RFD: Finance and Taxation Education
First Read: 02-May-23
2023 Regular Session
1
2
3
4
5
6
7
8
9 MP57H1-1 04/27/2023 FC (L) ma 2023-1805
Page 1
SYNOPSIS:
Under existing law, a physician who qualifies as
a rural physician in a small or rural community with a
small or rural hospital is entitled to a tax credit of
$5,000 each year for five years.
This bill would terminate the existing rural
physician income tax credit effective for tax years
beginning after December 31, 2023, but would authorize
a physician claiming the credit for the tax year ending
on December 31, 2023, to claim the credit for the
remainder of the five-year credit period available
under prior law.
This bill would further provide a new rural
physician income tax credit effective for tax year
beginning on or after January 1, 2024. The bill would
define rural community.
The bill would require the State Board of
Medical Examiners to issue certificates to physicians
who qualify for the tax credit.
A BILL
TO BE ENACTED
AN ACT
Relating to state income tax credits for rural
physicians; to designate Sections 40-18-130, 40-18-131, and
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 SB277 INTRODUCEDSB277 INTRODUCED
Page 2
40-18-132, Code of Alabama 1975, as Division 1 of Article 4A
of Chapter 18 of Title 40, Code of Alabama 1975; to terminate
the income tax credit authorized for a rural physician under
the existing Article 4A of Chapter 18, Title 40, Code of
Alabama 1975, effective December 31, 2023; to provide that any
physician who claimed the credit or claims the credit under
the existing Article 4A for the tax year ending on December
31, 2023, would be authorized to continue to claim the credit
under the prior law until the credit period authorized under
the prior law for that physician expires; to add Division 2 to
Article 4A of Chapter 18, Title 40, Code of Alabama 1975, to
further provide for a rural physician income tax credit; to
provide definitions; to modify the requirement for residence
and practice in a rural community; to remove the requirement
for hospital privileges in a rural community; and to require
the State Board of Medical Examiners to certify physicians who
qualify for the income tax credit.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Sections 40-18-130, 40-18-131, and
40-18-132, Code of Alabama 1975, shall be designated as
Division 1 of Article 4A of Chapter 18 of Title 40, Code of
Alabama 1975.
Section 2.(a) Any income tax credit authorized pursuant
to Division 1 of Article 4A of Chapter 18, Title 40, composed
of Sections 40-18-130, 40-18-131, and 40-18-132, Code of
Alabama 1975, is terminated effective for tax years ending
after December 31, 2023, except as provided in subsection (b).
(b) Notwithstanding subsection (a), any physician who
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56 SB277 INTRODUCEDSB277 INTRODUCED
Page 3
qualifies for and claims the credit under Division 1 of
Article 4A for the tax year ending on December 31, 2023, may
claim the credit under Division 1 for tax year 2023, and for
tax years thereafter up to the five-year credit period as
authorized under Division 1 for consecutive tax years. Any tax
year prior to 2023 in which the taxpayer claimed a credit
under Division 1 shall be included in the five-year limitation
for which the taxpayer is eligible to claim the credit.
(c) It is the intent of this section to authorize a
taxpayer eligible to claim the credit under Division 1 for the
2023 tax year to be grandfathered under Division 1 and
eligible to claim the tax credit for tax year 2023, and for
future tax years up to the five-year credit period authorized
under Division 1.
Section 3. Division 2 of Article 4A is added to Chapter
18 of Title 40, Code of Alabama 1975, commencing with Section
40-18-133, to read as follows:
Division 2.
§40-18-133
It is the intent of the Legislature to institute
programs that will make rural Alabama communities more
competitive in the recruitment and retention of physicians and
reduce inequities that rural communities have in the funding
and recruitment of physicians.
§40-18-133.1
For the purposes of this division, the following words
have the following meanings, respectively, unless the context
clearly indicates otherwise:
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84 SB277 INTRODUCEDSB277 INTRODUCED
Page 4
(1) PRACTICES MEDICINE. The practice of medicine or
osteopathy as defined in Section 34-24-50.
(2) RURAL COMMUNITY. According to the most recent
federal decennial census, an area within a county having a
population of 50,000 or less inhabitants, that is either of
the following:
a. A municipality that has a population of 15,000 or
less inhabitants.
b. The unincorporated area of the county.
(3) RURAL PHYSICIAN. A physician licensed to practice
medicine in Alabama who lives in a rural community and
practices medicine in a rural community.
§40-18-133.2.
(a)(1) Except as provided in subdivision (2), for tax
year beginning on or after January 1, 2024, and ending
December 31, 2028, unless extended by an act of the
Legislature, a physician newly qualifying as a rural physician
shall be allowed a credit against the tax imposed by Section
40-18-2, in the sum of five thousand dollars ($5,000) per tax
year. The tax credit may be claimed for not more than five tax
years if the physician continues to qualify as a rural
physician.
(2) No tax credit may be claimed under this division by
a physician who previously claimed a rural physician tax
credit under Division 1 prior to its termination, or
otherwise.
(3) No tax credit shall be allowed under this division
by a physician who practiced in a rural community prior to
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112 SB277 INTRODUCEDSB277 INTRODUCED
Page 5
January 1, 2024, unless, after January 1, 2024, the physician
returns to practice in a rural community after having
practiced in a large or urban community or outside of Alabama
for at least three years.
(b) Prior to claiming a credit under this division, a
rural physician shall submit to the State Board of Medical
Examiners, or its designee, adequate information to
substantiate that he or she qualifies for the income tax
credit. The board or its designee, upon review of the
documentation from the rural physician, shall make the
determination on whether he or she qualifies for the credit
and shall issue a certificate to the qualifying physician. The
certificate shall be submitted by the taxpayer at the time of
filing the return. Failure to submit the required certificate
to the Department of Revenue shall result in the automatic
denial of the credit.
(c) The State Board of Medical Examiners, or its
designee, shall submit an annual informational report to the
Department of Revenue by January 31 of each year that lists
all taxpayer issued certificates with information required by
the department for credit certification.
(d) Effective for tax years beginning after December
31, 2023, the Department of Revenue shall file an annual
informational report in accordance with Section 40-1-50 and
rules adopted under that section, for physicians who receive
the credit under this division.
(e) The Department of Revenue shall adopt any rules
necessary to implement and administer this division.
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
132
133
134
135
136
137
138
139
140 SB277 INTRODUCEDSB277 INTRODUCED
Page 6
Section 4. This act shall become effective immediately
following its passage and approval by the Governor, or its
otherwise becoming law.
141
142
143