HB1423 97TH GENERAL ASSEMBLY

LRB097 09266 HLH 49401 b

97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB1423

Introduced , by Rep. Sara Feigenholtz

SYNOPSIS AS INTRODUCED:

35 ILCS 5/221 new

Amends the Illinois Income Tax Act. Creates a credit for licensed hospitals in an amount equal to the lesser of the cost of charity care provided by the hospital during the tax year or the amount of real property taxes paid during the tax year on hospital property. Effective immediately.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning revenue.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Illinois Income Tax Act is amended by adding Section 221 as follows:

(35 ILCS 5/221 new)

Sec. 221. Hospital charity care credit. For tax years beginning on or after January 1, 2011 and ending on or before December 31, 2015, a taxpayer that is a hospital licensed under the Hospital Licensing Act is entitled to a credit against the taxes imposed under subsections (a) and (b) of Section 201 of this Act in an amount equal to the lesser of the cost of charity care provided by the hospital during the tax year or the amount of real property taxes paid during the tax year on real property used for hospital purposes during the prior tax year. If the taxpayer is a partnership or Subchapter S corporation, the credit is allowed to the partners or shareholders in accordance with the determination of income and distributive share of income under Sections 702 and 704 and Subchapter S of the Internal Revenue Code. A transfer of this credit may be made by the taxpayer earning the credit to another taxpayer within one year after the credit is earned in accordance with rules adopted by the Department. The Department must prescribe rules to enforce and administer provisions of this Section. If the amount of the credit exceeds the tax liability for the year, at the election of the taxpayer, the excess credit may be refunded or the excess may be carried forward and applied to the tax liability of the 5 taxable years following the excess credit year. The credit shall be applied to the earliest year for which there is a tax liability. If there are credits from more than one tax year that are available to offset a liability, the earlier credit shall be applied first.

When used in this Section, where not otherwise distinctly expressed or manifestly incompatible with the intent thereof:

"Charity care" means care provided by a health care facility for which the provider does not receive and does not expect to receive payment from the patient or a third-party payer (as defined in Section 10 of the Community Benefits Act). In documenting the costs incurred in providing charity care, a health care facility must document the cost of charity care services provided. A hospital shall document the cost of providing charity care services by multiplying the cost to charge ratio derived from the facility's Medicare cost report (CMS 2552-96 Worksheet C, Part 1,) by the amount of foregone revenue attributable to charity care services provided consistent with Section 20(a)(3) of the Community Benefits Act.

Section 99. Effective date. This Act takes effect upon becoming law.