2022 -- S 2757

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LC005545

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2022

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A N   A C T

RELATING TO TAXATION - PERSONAL INCOME TAX

     Introduced By: Senators Miller, DiMario, Lawson, Valverde, and DiPalma

     Date Introduced: March 24, 2022

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Section 44-30-101 of the General Laws in Chapter 44-30 entitled "Personal

Income Tax" is hereby amended to read as follows:

     44-30-101. Requirements concerning qualifying health insurance coverage.

     (a) Definitions. For purposes of this section:

     (1) "Applicable individual" has the same meaning as set forth in 26 U.S.C. § 5000A(d).

     (2) "Minimum essential coverage" has the same meaning as set forth in 26 U.S. C. §

5000A(f).

     (3) "Shared responsibility payment penalty" means the penalty imposed pursuant to

subsection (c) of this section.

     (4) "Taxpayer" means any resident individual, as defined in § 44-30-5.

     (b) Requirement to maintain minimum essential coverage. Every applicable individual

must maintain minimum essential coverage for each month beginning after December 31, 2019.

     (c) Shared responsibility payment penalty imposed for failing to maintain minimum

essential coverage. As of January 1, 2020, every applicable individual required to file a personal

income tax return pursuant to § 44-30-51, shall indicate on the return, in a manner to be prescribed

by the tax administrator, whether and for what period of time during the relevant tax year the

individual and his or her spouse and dependents who are applicable individuals were covered by

minimum essential coverage. If a return submitted pursuant to this subsection fails to indicate that

coverage was in force or indicates that any applicable individuals did not have coverage in force, a

shared responsibility payment penalty shall hereby be assessed as a tax on the return.

     (d) Shared responsibility payment penalty calculation. Except as provided in subsection

(e), the shared responsibility payment penalty imposed shall be equal to a taxpayer's federal shared

responsibility payment for the taxable year under section 5000A of the Internal Revenue Code of

1986, as amended, and as in effect on the 15th day of December 2017.

     (e) Exceptions.

     (1) Penalty cap. The amount of the shared responsibility payment penalty imposed under

this section shall be determined, if applicable, using the statewide average premium for bronze-

level plans offered through the Rhode Island health benefits exchange rather than the national

average premium for bronze-level plans.

     (2) Hardship exemption determinations. Determinations as to hardship exemptions shall be

made by the exchange under § 42-157-11.

     (3) Religious conscience exemption determinations. Determinations as to religious

conscience exemptions shall be made by the exchange under § 42-157-11.

     (4) Taxpayers with gross income below state filing threshold. No penalty shall be imposed

under this section with respect to any applicable individual for any month during a calendar year if

the taxpayer's household income for the taxable year as described in section 1412(b)(1)(B) of the

Patient Protection and Affordable Care Act is less than the amount of gross income requiring the

taxpayer to file a return as set forth in § 44-30-51.

     (5) Out of state residents. No penalty shall be imposed by this section with respect to any

applicable individual for any month during which the individual is a bona fide resident of another

state.

     (f) Health insurance market integrity fund. The tax administrator is authorized to withhold

from any state tax refund due to the taxpayer an amount equal to the calculated shared responsibility

payment penalty and shall place those amounts in the health insurance market integrity fund created

pursuant to § 42-157.1-5.

     (g) Deficiency. If, upon examination of a taxpayer's return, the tax administrator

determines there is a deficiency because any refund due to the taxpayer is insufficient to satisfy the

shared responsibility penalty or because there was no refund due, the tax administrator may notify

the taxpayer of the deficiency in accordance with § 44-30-81 and interest shall accrue on the

deficiency as set forth in § 44-30-84. All monies collected on the deficiency shall be placed in the

health insurance market integrity fund created pursuant to § 42-157.1-5.

     (h) Application of federal law. The shared responsibility payment penalty shall be assessed

and collected as set forth in this chapter and, where applicable, consistent with regulations

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promulgated by the federal government, the exchange, and/or the tax administrator. Any federal

regulation implementing section 5000A of the Internal Revenue Code of 1986, as amended, and in

effect on the 15th day of December 2017, shall apply as though incorporated into the Rhode Island

code of regulations. Federal guidance interpreting these federal regulations shall similarly apply.

Except as provided in subsections (j) and (k) of this section, all references to federal law shall be

construed as references to federal law as in effect on December 15, 2017, including applicable

regulations and administrative guidance that were in effect as of that date.

     (i) Unavailability of federal premium tax credits. For any taxable year in which federal

premium tax credits available pursuant to 26 U.S.C. section 36B become unavailable due to the

federal government repealing that section or failing to fund the premium tax credits, the shared

responsibility payment penalty under this section shall not be enforced.

     (j) Imposition of federal shared responsibility payment. For any taxable year in which a

federal penalty under section 5000A of the Internal Revenue Code of 1986 is imposed on a taxpayer

in an amount comparable to the shared responsibility payment penalty assessed under this section,

the state penalty shall not be enforced.

     (k) Agency coordination. Where applicable, the tax administrator shall implement this

section in consultation with the office of the health insurance commissioner, the office of

management and budget, the executive office of health and human services, and the Rhode Island

health benefits exchange.

     (l) Data Sharing.

     (1) Opt-In. Every applicable individual who indicates on a return that minimum essential

coverage required by subsection (b) of this section was not in force shall also indicate on the return,

in a manner prescribed by the tax administrator, whether the applicable individual consents to be

contacted directly by the Rhode Island health benefits exchange about enrollment in health

coverage.

     (2) Information to be disclosed. The tax administrator, upon written request from the Rhode

Island health benefits exchange, shall disclose the following information to officers, employees,

and contractors of the Rhode Island health benefits exchange, with respect to any applicable

individual who has consented to be contacted directly pursuant to subsection (1) of this section, for

the applicable year:

     (i) The name, age, mailing address, income and penalty amount due, if any, for the

consenting individual; and

     (ii) If applicable, the information for the consenting individual’s spouse and dependents

for the applicable year.

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     (iii) For purposes of this subsection, the term "applicable year" means the most recent

taxable year for which information is generally available in the Rhode Island department of

revenue's taxpayer data information systems, or, if there is no return filed for the individual for the

most recent taxable year, then the most recent taxable year in which the individual has filed a tax

return.

     (iv) Restriction on use of disclosed information. Return information disclosed under this

subsection may be used only for the purposes authorized by this subsection and § 42-157-13.

     (v) Privacy and security. The Rhode Island health benefits exchange and the tax

administrator shall develop a detailed set of data privacy and data security safeguards to govern the

conveyance of data between their agencies pursuant to the provisions of this subsection. With

respect to information disclosed by the tax administrator to the Rhode Island health benefits

exchange pursuant to this subsection, the Rhode Island health benefits exchange, its officers,

employees, and contractors, shall be subject to § 44-30-95(c).

     SECTION 2. This act shall take effect upon passage.

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LC005545

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO TAXATION - PERSONAL INCOME TAX

***

     This act would provide that every individual who fails to maintain the minimum essential

health care coverage for an applicable tax year shall indicate on their tax return whether the

individual desires to be contacted by the Rhode Island health benefits exchange about enrollment

in health coverage. If the taxpayer consents then the information would be disclosed to the health

benefits exchange upon written request.

     This act would take effect upon passage.

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LC005545

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