Alabama Senate Bill SB277

Alabama 2023 Regular Session

• Introduced: 5/2/23
• Refer: 5/2/23

Caption

Relating to state income tax credits for rural physicians; to designate Sections 40-18-130, 40-18-131, and 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.

Impact

The bill seeks to enhance the competitiveness of rural Alabama in attracting and retaining physicians, particularly addressing the disparities in healthcare provision in rural areas. By modifying the requirements for receiving the tax credit and introducing mechanisms for certification through the State Board of Medical Examiners, SB277 aims to streamline the process for new physicians entering rural practices. This new configuration is expected to bring greater clarity and encourage more medical professionals to serve in previously underserved areas, thus improving healthcare access for rural populations.

Summary

Senate Bill 277 (SB277) aims to modify the existing tax credit framework for rural physicians in Alabama. The bill terminates the existing rural physician income tax credit that has been effective for certain eligible practitioners, transitioning to a new system that establishes criteria for new rural physician credits beginning January 1, 2024. Under the proposed legislation, physicians who qualify can claim a credit of $5,000 per year for up to five years, given that they meet specified residency and practice requirements noted in the definitions of 'rural community' and 'rural physician'.

Contention

There are potential points of contention regarding the transition from the existing credit system to the new criteria set forth in SB277. Some stakeholders might question the implications of terminating the current tax credit for existing rural physicians and how that might affect their financial viability. Additionally, concerns may arise regarding the new requirements for certification, as physicians who have practiced outside of designated rural areas for more than three years may not qualify for the new credits unless they return to practice in a rural community. Stakeholders will need to navigate these changes to address both the retention of current practitioners and the attraction of new medical talent.