SB 62

Under existing law, an income tax credit is available to rural physicians who practice and reside in rural communities

Beginning with the 2018 tax year and ending with the 2022 tax year, this bill would provide rural physicians and dentists a state income tax credit in a tax year during which they reside and practice in areas of critical need, and allow the credit to be claimed for up to ten consecutive years

Relating to state income tax credits for rural physicians; to increase the number of years a state income tax credit is given to physicians who reside and practice in areas of critical need; and to extend the state income tax credit to dentists who reside and practice in areas of critical need.

Section 1

Section 40-18-132, Code of Alabama 1975, is amended to read as follows:

§40-18-132.

Beginning with the 1994 tax year and terminating with the 2017 tax year, a person qualifying as a rural physician shall be allowed a credit against the tax imposed by Section 40-18-2, in the sum of $5,000. No credit shall be allowed to a rural physician who is, on May 4, 1993, practicing in a small or rural community. No credit shall be allowed to a physician who has previously practiced in a small or rural community unless, after May 4, 1993, that physician returns to practice in a small or rural community after having practiced in a large or urban community for at least three years. The tax credit may be claimed for not more than five consecutive tax years. The Department of Revenue shall promulgate any rules and regulations necessary to implement and administer the provisions of this article."

Section 2

This act shall be known and cited as the Rural Physician and Dentist Credit Act of 2018.

Section 3

For the purposes of this act, the following words shall have the following meanings: (1) AREA OF CRITICAL NEED. Any location in Alabama that is not a part of, or within ten (10) miles of, either of the following: a. The legally defined boundaries of a municipal corporation with a population of more than 25,000 according to the latest decennial census. b. An urbanized area as defined most recently by the United States Census Bureau. (2) PRACTICING. Assessing, diagnosing, performing surgical procedures, treating, reporting, or giving advice in a medical capacity in a medical facility, not including a personal residence, located in an area of critical need. Practicing includes prescribing medicines and signing any medical certificate required for statutory purposes, such as death and cremation certificates. For purposes of this act, a physician or dentist may practice in multiple locations. (3) RURAL DENTIST. A dentist licensed to practice dentistry in Alabama who practices and resides in an area of critical need, and practices dentistry an annual average of at least 20 hours per week. (4) RURAL PHYSICIAN. A physician licensed to practice medicine in Alabama who practices and resides in an area of critical need, and practices medicine an annual average of at least 20 hours per week.

Section 4

Beginning with the 2018 tax year and ending with the 2022 tax year, a person qualifying as a rural physician or a rural dentist shall be allowed a credit against the tax imposed by Section 40-18-2, Code of Alabama 1975, in the sum of five thousand dollars ($5,000). No credit shall be allowed under this section to a rural physician or rural dentist who has previously practiced in an area of critical need, unless that physician or dentist returns to practice in an area of critical need after having practiced outside of an area of critical need for at least three years. The tax credit provided under this section may be claimed for not more than ten consecutive tax years, including the years of initial qualification, during which the person continues to qualify as a rural physician or rural dentist. A physician receiving the tax credit in Section 40-18-132, during the 2017 tax year who is also entitled to the tax credit under this section, shall be entitled to a tax credit of five thousand dollars ($5,000) per tax year for a period of ten years, less the number of years prior to tax year 2018 that the tax credit under Section 40-18-132 has been received.

Section 5

Prior to claiming a credit under this act, the Department of Revenue may require pre-certification information adequate to prove that the taxpayer is entitled to claim such credit. If a precertification process is implemented by the Department, following any necessary examination, the Department of Revenue shall issue a certification to taxpayers qualifying for the credit.

Section 6

The Department of Revenue shall promulgate any rules and regulations necessary to implement and administer the provisions of this article.

Section 7

Effective for tax years beginning after December 31, 2017, the Alabama Board of Medical Scholarship Awards shall file an annual informational report in accordance with Section 40-1-50 and rules adopted thereunder, for the physicians receiving the credit under this article. The Alabama Board of Dental Scholarship Awards shall file an annual informational report in accordance with Section 40-1-50 and rules adopted thereunder, for the dentists receiving a credit under this article.

Section 8

This act shall become effective for tax years beginning after December 31, 2017, following its passage and approval by the Governor, or its otherwise becoming law.