Print Friendly HOUSE BILL NO. 642 – Hospitals, charity care, reports
HOUSE BILL NO. 642
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H0642...................................................by LOCAL GOVERNMENT
HOSPITALS - Amends existing law to require information regarding charity
care and net profits in reports from certain hospitals exempt from property
02/21 House intro - 1st rdg - to printing
02/22 Rpt prt - to Rev/Tax
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-fifth Legislature Second Regular Session - 2000
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 642
BY LOCAL GOVERNMENT COMMITTEE
1 AN ACT
2 RELATING TO EXEMPTIONS FROM TAXATION; AMENDING SECTION 63-602D, IDAHO CODE, TO
3 REQUIRE INFORMATION REGARDING CHARITY CARE AND NET PROFITS IN REPORTS FROM
4 CERTAIN HOSPITALS EXEMPT FROM PROPERTY TAXATION.
5 Be It Enacted by the Legislature of the State of Idaho:
6 SECTION 1. That Section 63-602D, Idaho Code, be, and the same is hereby
7 amended to read as follows:
8 63-602D. PROPERTY EXEMPT FROM TAXATION -- CERTAIN HOSPITALS. (1) For the
9 purposes of this section, "hospital" means a hospital as defined by chapter
10 13, title 39, Idaho Code, and includes one (1) or more acute care, outreach,
11 satellite, outpatient, ancillary or support facilities of such hospital
12 whether or not any such individual facility would independently satisfy the
13 definition of hospital.
14 (2) The following property is exempt from taxation: the real property
15 owned and personal property, including medical equipment, owned or leased by a
16 hospital corporation which is operated as a hospital and the necessary grounds
17 used therewith.
18 (3) If real property, not currently exempt from taxation, is being pre-
19 pared for use as a hospital, the value of the bare land only shall be taxed
20 while the property is being prepared for use as a hospital. All improvements
21 to and construction on the real property, while it is being prepared for use
22 as a hospital, shall be exempt from taxation. For purposes of this section,
23 property is being "prepared for use as a hospital" if the corporation has
24 begun construction of a hospital project as evidenced by obtaining a building
25 permit that will, on completion, qualify such property for an exemption and,
26 as of the assessment date, has not abandoned the construction. Construction
27 shall not be considered abandoned if it has been delayed by causes and circum-
28 stances beyond the corporation's control or when delay is caused by an event
29 that has occurred in the absence of the corporation's willful neglect or
30 intentional acts, omissions or practices engaged in by the corporation for the
31 purpose of impeding progress. Notwithstanding the foregoing, in no event shall
32 improvements to property that is being prepared for use as a hospital qualify
33 for an exemption from ad valorem property tax under this subsection for more
34 than three (3) consecutive tax years; upon completion of construction and
35 obtaining a certificate of occupancy, the entire real property shall be exempt
36 from taxation if the corporation meets the requirements of subsection (4) of
37 this section; provided, property already exempt or eligible for exemption
38 shall not be affected by the provisions of this subsection.
39 (4) The corporation must show that the hospital:
40 (a) Is organized as a nonprofit corporation pursuant to chapter 3, title
41 30, Idaho Code, or pursuant to equivalent laws in its state of incorpora-
43 (b) Has received an exemption from taxation from the Internal Revenue
1 Service pursuant to section 501(c)(3) of the Internal Revenue Code.
2 (5) The board of equalization shall grant an exemption to the property of
3 any hospital corporation meeting the criteria provided in subsection (4) of
4 this section.
5 (6) If a hospital corporation uses property for business purposes from
6 which a revenue is derived which is not directly related to the hospital
7 corporation's exempt purposes, then the property shall be assessed and taxed
8 as any other property. If property is used in part by a hospital corporation
9 for such purposes, then the assessor shall determine the value of the entire
10 property and the value of the part used that is not directly related to the
11 hospital corporation's exempt purposes. If the value of the part which is not
12 directly related to the hospital corporation's exempt purposes is determined
13 to be three percent (3%) or less than the value of the entire property, then
14 the property shall remain exempt. If the value of the part which is not
15 directly related to the hospital corporation's exempt purposes is determined
16 to be more than three percent (3%) of the value of the entire property, then
17 the assessor shall assess the proportionate part of the property, including
18 the value of the real estate used for such purposes.
19 (7) A hospital corporation issued an exemption from property taxation
20 pursuant to this section and operating a hospital having one hundred fifty
21 (150) or more patient beds shall prepare a community benefits report to be
22 filed with the board of equalization by December 31 of each year. The report
23 shall itemize and provide, under the signature of the hospital's auditor, the
24 amount of charity care provided by the hospital and the hospital's net profit
25 in the prior year, the hospital's amount of unreimbursed services for the
26 prior year (including charity care, bad debt, and underreimbursed care covered
27 through government programs); special services and programs the hospital pro-
28 vides below its actual cost; donated time, funds, subsidies and in-kind ser-
29 vices; additions to capital such as physical plant and equipment; and indica-
30 tion of the process the hospital has used to determine general community needs
31 which coincide with the hospital's mission. The report shall be provided as a
32 matter of community information. Neither the submission of the report nor the
33 contents shall be a basis for the approval or denial of a corporation's prop-
34 erty tax exemption.
STATEMENT OF PURPOSE
Non profit hospitals in Idaho submit community development plans pursuant to a
change in the law in 1999. However, the plans do not contain information from a
hospital's audited financial statements as to the amounts of charity care and net
profits. This bill would require that such information be provided under signature
of the hospital's auditor. Such a requirement would ensure the public has solid
figures to track a hospital's progress in these areas from year to year and to
compare one hospital to another. This bill does not require certain levels of
financial commitment in these areas, but only that an auditor certify the amounts.
This bill will ensure that accounting and auditing standards are applied to the
reporting of these figures.
There is no fiscal impact.
CONTACT: Rep. David Bieter
STATEMENT OF PURPOSE/ FISCAL NOTE H