HB475 Alabama 2023 Session

Summary

Primary Sponsor

Terri CollinsRepresentative

Republican

Session

Regular Session 2023

Title

Relating to rural hospitals; to provide for funding of rural hospitals by creating the Rural Hospital Investment Program; to establish a governing board to administer the program, to provide for a state income tax credit in exchange for donations to rural hospitals; and to provide for coordination with the Department of Revenue.

Summary

HB475 creates the Rural Hospital Investment Program to fund Alabama rural hospitals through donations incentivized by a state income tax credit and overseen by a new board.

What This Bill Does

It sets up a Rural Hospital Investment Program and a governing board within the Office of the State Treasurer to manage donations and determine which rural hospitals are eligible. It offers a state income tax credit for qualified donations to eligible rural hospitals, with annual statewide caps that increase over time and per-year limits based on filing status and entity type; the credit cannot exceed the donor’s tax liability and unused credits can be carried forward up to three years. It defines eligibility for rural hospitals (licensed general acute or critical access, rural location, Medicaid/Medicare participation, indigent care, five-year plan, and compliance with audits) and requires reporting by hospitals and publication of eligible hospitals. The program requires preapproval of donations, coordination with the Department of Revenue, and allows hospitals to use donations for care, operations, maintenance, and facility upgrades, with a limit on fees for soliciting donations and annual reporting requirements.

Who It Affects

• Qualified donors (individuals and various entities) who donate to eligible rural hospitals and can claim a state income tax credit against their Alabama tax liability, subject to annual and per-donor limits and carryforward rules.
• Eligible rural hospitals that meet the program’s criteria and can receive donations for patient care, operations, maintenance, and capital improvements, while complying with reporting and planning requirements.

Key Provisions

• Creates the Rural Hospital Investment Program and establishes the Rural Hospital Investment Program Board within the Office of the State Treasurer to oversee the program and coordinate with the Department of Revenue.
• Implements a state income tax credit for qualified donations to eligible rural hospitals, with 100% credit in the initial year and subsequent years, subject to per-tax-year limits by filer type (individual $15,000; married filing jointly $30,000; pass-through entities up to $450,000; corporations up to $500,000).
• The total statewide credit cap is set at $38,000,000 for 2024, $60,000,000 for 2025, and $80,000,000 for 2026 and thereafter; credits cannot exceed a taxpayer’s income tax liability and unused credits may be carried forward for up to three years.
• No more than $2,000,000 of credits can be contributed to any single eligible rural hospital in a tax year; the Department must preapprove each qualified donation for compliance with limits.
• Eligible rural hospitals must be licensed, located in a rural area, serve Medicaid/Medicare without discrimination, provide care to indigent patients, comply with reports and audits, and submit a five-year plan detailing use of donations and financial viability.
• Hospitals may retain up to 5% of qualified donations to solicit or manage those donations; hospitals must file annual reports on donations and uses by March 1 each year; the board and Department publish lists of eligible hospitals by December 31 for the next tax year.
• The program becomes effective January 1, 2024, with rules to be adopted and ongoing administration and publicity activities to promote the program.

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

Subjects

Establishing a tax credit for financial support of rural hospitals