HOUSE BILL 893

45th legislature - STATE OF NEW MEXICO - first session, 2001

INTRODUCED BY

Ben Lujan







AN ACT

RELATING TO TAXATION; PROVIDING A GROSS RECEIPTS TAX CREDIT FOR CHARITY CARE PROVIDED BY FOR-PROFIT HOSPITALS.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

Section 1. A new section of the Gross Receipts and Compensating Tax Act is enacted to read:

"[NEW MATERIAL] CREDIT--GROSS RECEIPTS TAX--CHARITY CARE BY FOR-PROFIT HOSPITALS.--

A. A for-profit hospital licensed by the department of health may claim a credit against the gross receipts tax in an amount equal to the uncompensated charity care provided by the hospital. To claim the credit, the taxpayer shall file with the department the amount of uncompensated charity care provided by the hospital for a quarterly, semiannual or annual period beginning on or after July 1, 2001. Upon filing, the credit may be taken against the taxpayer's gross receipts tax liability in succeeding reporting periods.

B. As used in this section:

(1) "charity care" means the unpaid amount of a hospital's charges for the provision of medically necessary care to an individual who has a household income less than two hundred percent of the federal poverty level, is without any reasonably identifiable alternative third party or other payment sources and has been deemed, pursuant to the hospital's credit and collection policies and procedures, financially unable to pay for all or part of the services rendered. "Charity care" does not include the difference between full charges and the allowable amount paid by a third party;

(2) "cost-to-charge ratio" means the relationship that a hospital's total operating expenses bear to the hospital's reported charges for the same period as determined by the federal health care financing administration medicare cost report filed by the hospital; and

(3) "uncompensated charity care" means for any period, the charity care for that period multiplied by the cost-to-charge ratio for that same period."

Section 2. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2001.