HF 1993

as introduced - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to taxation; reducing the MinnesotaCare 
  1.3             provider tax rate for furnishing dental goods and 
  1.4             services; amending Minnesota Statutes 1996, sections 
  1.5             295.52, subdivision 2; 295.53, subdivision 4; and 
  1.6             295.582. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 1996, section 295.52, 
  1.9   subdivision 2, is amended to read: 
  1.10     Subd. 2.  [PROVIDER TAX.] A tax is imposed on each health 
  1.11  care provider equal to: 
  1.12     (1) one percent of its gross revenues from the furnishing 
  1.13  of dental goods and services; and 
  1.14     (2) two percent of its all other gross revenues. 
  1.15     Sec. 2.  Minnesota Statutes 1996, section 295.53, 
  1.16  subdivision 4, is amended to read: 
  1.17     Subd. 4.  [DEDUCTION FOR RESEARCH.] (a) In addition to the 
  1.18  exemptions allowed under subdivision 1, a hospital or health 
  1.19  care provider which is exempt under section 501(c)(3) of the 
  1.20  Internal Revenue Code of 1986 or is owned and operated under 
  1.21  authority of a governmental unit, may deduct from its gross 
  1.22  revenues subject to the hospital or health care provider taxes 
  1.23  under sections 295.50 to 295.57 revenues equal to expenditures 
  1.24  for allowable research programs.  
  1.25     (b) For purposes of this subdivision, expenditures for 
  1.26  allowable research programs are the direct and general program 
  2.1   costs for activities which are part of a formal program of 
  2.2   medical and health care research approved by the governing body 
  2.3   of the hospital or health care provider which also includes 
  2.4   active solicitation of research funds from government and 
  2.5   private sources.  Allowable research must:  
  2.6      (1) have as its purpose the development of new knowledge in 
  2.7   basic or applied science relating to the diagnosis and treatment 
  2.8   of conditions affecting the human body; 
  2.9      (2) be subject to review by individuals with expertise in 
  2.10  the subject matter of the proposed study but who have no 
  2.11  financial interest in the proposed study and are not involved in 
  2.12  the conduct of the proposed study; and 
  2.13     (3) be subject to review and supervision by an 
  2.14  institutional review board operating in conformity with federal 
  2.15  regulations if the research involves human subjects or an 
  2.16  institutional animal care and use committee operating in 
  2.17  conformity with federal regulations if the research involves 
  2.18  animal subjects.  Research expenses are not exempt if the study 
  2.19  is a routine evaluation of health care methods or products used 
  2.20  in a particular setting conducted for the purpose of making a 
  2.21  management decision.  Costs of clinical research activities paid 
  2.22  directly for the benefit of an individual patient are excluded 
  2.23  from this exemption.  Basic research in fields including 
  2.24  biochemistry, molecular biology, and physiology are also 
  2.25  included if such programs are subject to a peer review process. 
  2.26     (c) No deduction shall be allowed under this subdivision 
  2.27  for any revenue received by the hospital or health care provider 
  2.28  in the form of a grant, gift, or otherwise, whether from a 
  2.29  government or nongovernment source, on which the tax liability 
  2.30  under section 295.52 is not imposed or for which the tax 
  2.31  liability under section 295.52 has been received from a third 
  2.32  party as provided for in section 295.582. 
  2.33     (d) Effective beginning with calendar year 1995, the 
  2.34  taxpayer shall not take the deduction under this section into 
  2.35  account in determining estimated tax payments or the payment 
  2.36  made with the annual return under section 295.55.  The total 
  3.1   deduction allowable to all taxpayers under this section for 
  3.2   calendar years beginning after December 31, 1994, may not exceed 
  3.3   $65,000,000.  To implement this limit, each qualifying hospital 
  3.4   and qualifying health care provider shall submit to the 
  3.5   commissioner by March 15 its total expenditures qualifying for 
  3.6   the deduction under this section for the previous calendar 
  3.7   year.  The commissioner shall sum the total expenditures of all 
  3.8   taxpayers qualifying under this section for the calendar year.  
  3.9   If the resulting amount exceeds $65,000,000, the commissioner 
  3.10  shall allocate a part of the $65,000,000 deduction limit to each 
  3.11  qualifying hospital and health care provider in proportion to 
  3.12  its share of the total deductions.  The commissioner shall pay a 
  3.13  refund to each qualifying hospital or provider equal to its 
  3.14  share of the deduction limit multiplied by two percent its rate 
  3.15  of tax.  The commissioner shall pay the refund no later than May 
  3.16  15 of the calendar year. 
  3.17     Sec. 3.  Minnesota Statutes 1996, section 295.582, is 
  3.18  amended to read: 
  3.19     295.582 [AUTHORITY.] 
  3.20     (a) A hospital, surgical center, pharmacy, or health care 
  3.21  provider that is subject to a tax under section 295.52, or a 
  3.22  pharmacy that has paid additional expense transferred under this 
  3.23  section by a wholesale drug distributor, may transfer additional 
  3.24  expense generated by section 295.52 obligations on to all 
  3.25  third-party contracts for the purchase of health care services 
  3.26  on behalf of a patient or consumer.  The additional expense 
  3.27  transferred to the third-party purchaser must not exceed two 
  3.28  percent of the gross revenues received under the third-party 
  3.29  contract, and two percent of copayments and deductibles paid by 
  3.30  the individual patient or consumer.; except that for health care 
  3.31  providers providing dental goods and services, the additional 
  3.32  expense transferred to the third-party purchaser must not exceed 
  3.33  one percent of the gross revenues received under the third-party 
  3.34  contract and one percent of copayments and deductibles paid by 
  3.35  the individual patient or consumer.  The expense must not be 
  3.36  generated on revenues derived from payments that are excluded 
  4.1   from the tax under section 295.53.  All third-party purchasers 
  4.2   of health care services including, but not limited to, 
  4.3   third-party purchasers regulated under chapter 60A, 62A, 62C, 
  4.4   62D, 62H, 62N, 64B, 65A, 65B, 79, or 79A, or under section 
  4.5   471.61 or 471.617, must pay the transferred expense in addition 
  4.6   to any payments due under existing contracts with the hospital, 
  4.7   surgical center, pharmacy, or health care provider, to the 
  4.8   extent allowed under federal law.  A third-party purchaser of 
  4.9   health care services includes, but is not limited to, a health 
  4.10  carrier, integrated service network, or community integrated 
  4.11  service network that pays for health care services on behalf of 
  4.12  patients or that reimburses, indemnifies, compensates, or 
  4.13  otherwise insures patients for health care services.  A 
  4.14  third-party purchaser shall comply with this section regardless 
  4.15  of whether the third-party purchaser is a for-profit, 
  4.16  not-for-profit, or nonprofit entity.  A wholesale drug 
  4.17  distributor may transfer additional expense generated by section 
  4.18  295.52 obligations to entities that purchase from the 
  4.19  wholesaler, and the entities must pay the additional expense.  
  4.20  Nothing in this section limits the ability of a hospital, 
  4.21  surgical center, pharmacy, wholesale drug distributor, or health 
  4.22  care provider to recover all or part of the section 295.52 
  4.23  obligation by other methods, including increasing fees or 
  4.24  charges. 
  4.25     (b) Each third-party purchaser regulated under any chapter 
  4.26  cited in paragraph (a) shall include with its annual renewal for 
  4.27  certification of authority or licensure documentation indicating 
  4.28  compliance with paragraph (a).  If the commissioner responsible 
  4.29  for regulating the third-party purchaser finds at any time that 
  4.30  the third-party purchaser has not complied with paragraph (a), 
  4.31  the commissioner may by order fine or censure the third-party 
  4.32  purchaser or revoke or suspend the certificate of authority or 
  4.33  license of the third-party purchaser to do business in this 
  4.34  state.  The third-party purchaser may appeal the commissioner's 
  4.35  order through a contested case hearing in accordance with 
  4.36  chapter 14. 
  5.1      Sec. 4.  [EFFECTIVE DATE.] 
  5.2      Section 1 is effective for gross revenues received and 
  5.3   dental services performed or dental goods provided on or after 
  5.4   January 1, 1998.  Section 2 is effective for expenditures for 
  5.5   research on or after January 1, 1998.  Section 3 is effective 
  5.6   for services performed on or after January 1, 1998.