SB2298

SECTION 1. The legislature finds that demand for healthcare providers in Hawaii is growing because of an increase in population size, particularly among the aged population; an improvement in access to care due to broader insurance coverage; and a higher prevalence of chronic diseases. At the same time, there is a primary care provider shortage in Hawaii that will be exacerbated by the projected retirements of current physicians and advanced practice registered nurses. If nothing is done to address the gap between healthcare supply and demand, patients will suffer from longer wait times to see providers and poorer health outcomes. Even more so, the evolution of healthcare delivery means academic institutions across Hawaii face challenges in ensuring an adequate number of future healthcare professionals who are well-distributed by location and by specialty and who are prepared to deliver healthcare in primary, specialty, and behavioral health care in rural, urban, and suburban settings across Hawaii. Thus, the legislature acknowledges that in order to meet these growing healthcare demands, the State must work with academic institutions and healthcare professionals to ensure that there is an adequate and well-prepared healthcare workforce.

The legislature further finds that Hawaii high school students and residents are interested in pursuing careers in the healthcare service industry. However, in-state educational institutions are constrained by the lack of clinical education sites in Hawaii and the limited supply of qualified primary and specialty care preceptors. The legislatures recognizes that current efforts are underway to address these clinical site limitations, including travel support from health professional schools in Hawaii for students and residents who are incurring high costs for training away from their home island. With out-of-state training having such a high cost, the State must consider expanding in-state healthcare provider education capacity.

The legislature also finds that the development of new clinical preceptors and training sites is increasingly difficult. The cohort of preceptors consists largely of volunteers who share the kuleana of educating the future healthcare workforce. Yet, providers who offer such volunteer-based education assume this responsibility above and beyond their regular patient-care responsibilities, subjecting themselves to preceptor fatigue, especially in busy clinical settings. Developing sufficient clinical training opportunities in areas of high demand requires a sufficient number of appropriately trained preceptors, but the limited availability of preceptors restricts in-state healthcare academic institutions from expanding healthcare provider training. Some states, including Maryland, Georgia, and Colorado, have identified preceptor tax exemptions as a means to increase the supply of health professional preceptors and trainees.

The purpose of this Act is to create a tax credit that encourages preceptors to offer professional instruction, training, and supervision to students and residents seeking careers as healthcare providers throughout Hawaii, with the intention of building capacity for clinical education at in-state academic programs that are nationally accredited for the training of medical, nursing, dental hygiene, or pharmacy professionals.

SECTION 2. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§235- Healthcare preceptor tax credit. (a) There shall be allowed to each taxpayer subject to the tax imposed by this chapter, a healthcare preceptor tax credit for supervising volunteer-based supervised clinical training rotations which shall be deductible from the taxpayer's net income tax liability, if any, imposed by this chapter for the taxable year in which the credit is properly claimed.

(b) The amount of the credit determined under this section for the taxable year shall be equal to $1,000 for each volunteer-based supervised clinical training rotation supervised by the taxpayer; provided that the aggregate amount of tax credit awarded to any taxpayer pursuant to this section shall not exceed $5,000 for any income tax year regardless of the number of volunteer-based supervised clinical training rotations supervised by the taxpayer.

(1) Shall prepare any forms that may be necessary to claim a tax credit under this section;

(2) May require the taxpayer to furnish reasonable information to ascertain the validity of the claim for the tax credit made under this section; and

(3) May adopt rules pursuant to chapter 91 necessary to effectuate the purposes of this section.

(d) The healthcare preceptor tax credit working group, established pursuant to section 321- , shall:

(1) Maintain records of the names and addresses of the qualified taxpayers claiming the credits under this section; and

(2) Certify the number of volunteer-based supervised clinical training rotations each taxpayer supervised by verifying for each volunteer-based supervised clinical training rotation the number of hours the taxpayer spent supervising an eligible student or trainee and whether the taxpayer was uncompensated.

Upon each determination, the healthcare preceptor tax credit working group shall issue a certificate to the taxpayer verifying the number of volunteer-based supervised clinical training rotations supervised by the taxpayer.

(e) If in any taxable year the annual amount of certified credits reaches $2,000,000 in the aggregate, the healthcare preceptor tax credit working group shall immediately discontinue certifying credits and notify the department of taxation. In no instance shall the healthcare preceptor tax credit working group certify a total amount of credits exceeding $2,000,000 per taxable year. To comply with this restriction, the healthcare preceptor tax credit working group shall certify credits on a first come, first served basis.

(f) A tax credit under this section that exceeds the taxpayer's income tax liability may be used as a credit against the taxpayer's income tax liability in subsequent years until exhausted. All claims for tax credits under this section, including any amended claims, shall be filed on or before the end of the twelfth month following the close of the taxable year for which the credits may be claimed. Failure to comply with this subsection shall constitute a waiver of the right to claim the credit.

(g) For the purpose of this section:

"Academic program" means an academic program that holds its principal accreditation in Hawaii.

"Advanced practice registered nurse student" means an individual participating in an academic program that is nationally accredited for the training of individuals to become advanced practice registered nurses pursuant to chapter 457.

"Dental hygienist student" means an individual participating in an academic program that is nationally accredited for the training of dental hygienists or expanded dental hygienist pursuant to chapter 447.

"Eligible professional degree or training certificate" means a degree or certificate that fulfills a requirement to be a dental hygienist pursuant to chapter 447, a physician or osteopathic physician pursuant to chapter 453, an advanced practice registered nurse pursuant to chapter 457, a pharmacist pursuant to chapter 461, or a psychologist pursuant to chapter 465.

"Eligible student or trainee" means an advanced practice registered nurse student, dental hygienist student, medical student, pharmacy student, psychology student, or resident or similar health science trainee.

"Medical student" means an individual participating in an academic program that is nationally accredited for the training of physicians or osteopathic physicians pursuant to chapter 453.

"Nationally accredited" means holding an institutional accreditation by name to offer post-secondary education as a United States-based institution from a national accrediting agency recognized by the United States Department of Education.

"Pharmacy student" means an individual participating in an academic program that is nationally accredited for the training of individuals to become registered pharmacists pursuant to chapter 461.

"Preceptor" means a dentist or dental surgeon licensed pursuant to chapter 448, a physician or osteopathic physician licensed pursuant to chapter 453, an advanced practice registered nurse licensed pursuant to chapter 457, a pharmacist licensed pursuant to chapter 461, or a psychologist licensed pursuant to chapter 465.

"Psychology student" means an individual participating in an academic program that is nationally accredited for the training of individuals to become psychologists pursuant to chapter 465.

"Resident or similar health science trainee" means a post-graduate health science trainee enrolled in an accredited academic program that is nationally accredited for such training pursuant to chapter 447, 453, 457, 461, or 465.

"Volunteer-based supervised clinical training rotation" means an uncompensated period of supervised clinical training on behalf of an eligible student or trainee that totals at least eighty hours of supervisory time annually, in which a preceptor provides personalized instruction, training, and supervision that is offered to an eligible student or trainee to enable the eligible student or trainee to obtain an eligible professional degree or training certificate."

SECTION 3. Chapter 321, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§321- Healthcare preceptor tax credit working group. (a) There is established the healthcare preceptor tax credit working group within the department of health, to be convened by the University of Hawaii Hawaii/Pacific basin area health education center and center for nursing. The working group shall:

(1) Discuss and create a comprehensive plan to address healthcare preceptor shortages in this State; and

(2) Develop and implement a plan for allocating and distributing healthcare preceptor tax credits under section 235- .

(b) The working group shall be composed of the following members or their designees:

(1) Deans or directors of each academic program that is nationally accredited for the training of dental hygienists pursuant to chapter 447;

(2) Deans or directors of each academic program that is nationally accredited for the training of physicians or osteopathic physicians pursuant to chapter 453;

(3) Deans or directors of each academic program that is nationally accredited for the training of advanced practice registered nurses pursuant to chapter 457; and

(4) Deans or directors of each academic program that is nationally accredited for the training of pharmacists pursuant to chapter 461.

"Academic program" shall have the same meaning as in section 235- .

"Nationally accredited" shall have the same meaning as in section 235- ."

SECTION 4. The department of health shall evaluate the efficacy of the healthcare preceptor tax credit established by this Act and submit a report to the legislature no later than June 30, 2024, which shall include the department's findings and a recommendation of whether the tax credit should be retained or repealed.

SECTION 5. New statutory material is underscored.

SECTION 6. This Act shall take effect upon its approval; provided that section 2 shall apply to taxable years beginning after December 31, 2018.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	2298
TWENTY-NINTH LEGISLATURE, 2018
STATE OF HAWAII