HB283 Alabama 2023 Session

Summary

Primary Sponsor

Ed OliverRepresentative

Republican

Session

Regular Session 2023

Title

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.

Summary

HB283 redesigns Alabama's rural physician tax credit by ending the old program after 2023, grandfathering 2023 claims, and creating a new, board-certified rural physician credit starting in 2024 with defined rural residency and practice rules.

What This Bill Does

The existing rural physician tax credit ($5,000 per year for five years) is terminated for years after 12/31/2023, but physicians who claimed it for the 2023 tax year can continue to use the old credit through the remainder of their five-year period. A new rural physician credit begins in 2024 under Division 2, offering $5,000 per year for up to five years for physicians who meet the new rural criteria and obtain certification. The bill removes the hospital privileges requirement, defines rural communities and rural physicians, requires certification by the State Board of Medical Examiners, and requires certification information to be submitted with tax returns; the Department of Revenue and the Board will handle reporting and rulemaking. There are grandfathering provisions for physicians who practiced in rural areas before 2024 and then left for at least three years before returning.

Who It Affects

• Rural physicians who live and practice in designated rural communities (eligible for the new $5,000/year tax credit for up to five years starting in 2024, contingent on certification and ongoing qualification). 2023 credits claimed under the old program may continue through the remaining period.
• State Board of Medical Examiners and the Department of Revenue, which must certify eligible physicians, issue certificates, collect certificate information, and produce annual reports related to the credit; the Department will also adopt rules to administer the new Division 2 credit.

Key Provisions

• Terminates the existing rural physician income tax credit for tax years beginning after 12/31/2023.
• Grandfathering: physicians who claimed the old credit for the 2023 tax year may continue to claim it under the old law for the remainder of their five-year period.
• Creates Division 2 of Article 4A starting 1/1/2024, providing a new rural physician tax credit of $5,000 per tax year for up to five tax years, if the physician qualifies and remains in a rural community.
• Defines rural community and rural physician, and removes the hospital privileges requirement from qualification.
• Requires physicians to obtain certification from the State Board of Medical Examiners before claiming the credit; certification must be submitted with the tax return; failure to submit results in automatic denial.
• Board; depending on the process, will issue annual informational reports on certified taxpayers to the Department of Revenue; the Department will issue annual informational reports on recipients and adopt rules to administer the credit.
• Qualification limitations: a physician who previously claimed the old credit cannot claim the new credit under Division 2; physicians who practiced in a rural area prior to 1/1/2024 must return to rural practice after leaving for urban or out-of-state for at least three years to be eligible after 1/1/2024.
• Effective date: immediate for purposes of enactment and administration; the provisions become law upon approval.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.