HB46INTRODUCED
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HB46
9RZHPBM-1
By Representative Oliver
RFD: Ways and Means Education
First Read: 04-Feb-25
PFD: 01-Oct-24
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6 9RZHPBM-1 09/09/2024 PMG (L) PMG 2024-2092
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PFD: 01-Oct-24
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 credit is
repealed effective December 31, 2028.
This bill would move up the repeal date of the
existing rural physician income tax credit to end with
the tax year ending on December 31, 2025, but would
authorize a physician claiming the credit for the tax
year ending on December 31, 2025, to claim the new
physician income tax credit for the remainder of the
five-year credit period if the physician qualifies
under the new credit.
This bill would further provide a new rural
physician income tax credit effective for tax years
beginning on or after January 1, 2026, for four years.
The bill would further define the requirements
for residence and the definition of a "rural
community."
The bill would require the Alabama Statewide
Area Health Education Center Program Office to
administer the program and to issue certificates to
physicians who qualify for the tax credit.
A BILL
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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,
40-18-132, and 40-18-133, Code of Alabama 1975, as Division 1
of Article 4A of Chapter 18 of Title 40, Code of Alabama 1975,
and to move up the repeal of the income tax credit authorized
for a rural physician under Division 1 to be effective
December 31, 2025; to add Division 2 to Article 4A of Chapter
18, Title 40, Code of Alabama 1975, to provide for a new rural
physician income tax credit; to provide definitions; and to
require the Alabama Statewide Area Health Education Center
Program Office, in consultation with the State Board of
Medical Examiners, to certify physicians who qualify for the
new income tax credit.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1.(a) Sections 40-18-130, 40-18-131, 40-18-132,
and 40-18-133, Code of Alabama 1975, are designated as
Division 1 of Article 4A of Chapter 18 of Title 40, Code of
Alabama 1975.
Section 2. Section 40-18-133, Code of Alabama 1975, is
amended to read as follows:
"§40-18-133
(a) The Rural Physician Tax Credit ,under Division 1 of
Article 4A, commencing with Section 40-18-130, Chapter 18, of
Title 40, is repealed terminated effective December 31, 2028,
unless extended by an act of the Legislature prior to that
date for no more than five additional years 2025.
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date for no more than five additional years 2025.
(b) The repealing terminating of the incentives in
subsection (a) shall only affect the availability of the tax
credits after December 31, 2028, and shall not cause a
reduction or suspension of any credits awarded on or prior to
December 31, 20252028.
Section 3. Division 2 of Article 4A, commencing with
Section 40-18-134, is added to Chapter 18 of Title 40, Code of
Alabama 1975, to read as follows:
Division 2.
§40-18-134
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.
§40-18-134.1
For the purposes of this division, the following words
have the following meanings, respectively, unless the context
clearly indicates otherwise:
(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 one of the
following:
a. A municipality that has a population of 20,000 or
less inhabitants.
b. The unincorporated area of the county.
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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.
§40-18-134.2
(a)(1) Except as provided in subdivision (2), for tax
years beginning on or after January 1, 2026, and ending
December 31, 2030, a physician qualifying as a rural physician
under this division shall be allowed a credit against the tax
imposed by Section 40-18-2, in the sum of ten thousand dollars
($10,000) per tax year. The tax credit under this subdivision
may be claimed for not more than four tax years except as
provided in subdivision (2).
(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 January 1, 2026, except a
physician who claimed a tax credit under Division 1 for less
than the five years authorized under Division 1 prior to
January 1, 2025, and who is otherwise eligible to claim a
credit under this division, may claim a tax credit under this
division for the remainder of the five-year credit period
previously authorized under Division 1.
(3) No tax credit shall be allowed under this division
by a physician who practiced in a rural community prior to
January 1, 2026, unless on or after January 1, 2026, 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
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(b) Prior to claiming a credit under this division, a
rural physician shall submit to the Alabama Statewide Area
Health Education Center Program Office, or its successor,
adequate information to substantiate that he or she qualifies
for the income tax credit. The Alabama Statewide Area Health
Education Center Program Office, upon review of the
documentation from the rural physician, shall make the
determination on whether the physician 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 Alabama Statewide Area Health Education Center
Program Office 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 January 1, 2026,
and ending December 31, 2030, 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.
(f) The Alabama Board of Medical Examiners shall assist
the Alabama Statewide Area Health Education Center Program
Office in verifying the eligibility of physicians applying for
the credit.
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the credit.
(g) The Alabama Commission on the Evaluation of
Services shall consult with the Alabama Statewide Area Health
Education Center Program Office to develop performance metrics
and other measures of success to include in the annual report
required pursuant to subsection (d). During the 2030 fiscal
year, this incentive shall undergo an evaluation by the
Alabama Commission on the Evaluation of Services to determine
whether the program is impacting the determined measures of
success.
(h) The Alabama Commission on the Evaluation of
Services shall consult with the Alabama Statewide Area Health
Education Center Program Office to develop the appropriate
measures and methodology for conducting the needs assessment.
Section 4. Division 1 of Article 4A of Chapter 18 of
Title 40, Code of Alabama 1975, consisting of Sections
40-18-130, 40-18-131, 40-18-132, and 40-18-133, is repealed.
Section 5. This act shall become effective October 1,
2025, except Section 4 shall become effective December 31,
2025.
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