ARTICLE 11 SUBSTITUTE A AS AMENDED

RELATING TO HOSPITAL FACILITIES and other medical facilities and services

SECTION 1. Section 23-17-38.1 of the General Laws in Chapter 23-17 entitled “Licensing of Health Care Facilities” is hereby amended as follows:

23-17-38.1. Hospitals – Licensing fee. -- (a) There is imposed a hospital licensing fee at the rate of three and fifty-six hundredths percent (3.56%) upon the net patient services revenue of every hospital for the hospital's first fiscal year ending on or after January 1, 2004. This licensing fee shall be administered and collected by the tax administrator, division of taxation within the department of administration, and all the administration, collection and other provisions of chapter 50 and 51 of title 44 shall apply. Every hospital shall pay the licensing fee to the tax administrator on or before July 16, 2007 and payments shall be made by electronic transfer of monies to the general treasurer and deposited to the general fund in accordance with § 44-50-11. Every hospital shall, on or before June 15, 2007, make a return to the tax administrator containing the correct computation of net patient services revenue for the hospital fiscal year ending September 30, 2004, and the licensing fee due upon that amount. All returns shall be signed by the hospital's authorized representative, subject to the pains and penalties of perjury.

(b) There is imposed a hospital licensing fee at the rate of three and forty-eight hundredths percent (3.48%) upon the net patient services revenue of every hospital for the hospital's first fiscal year ending on or after January 1, 2006. This licensing fee shall be administered and collected by the tax administrator, division of taxation within the department of administration, and all the administration, collection and other provisions of chapter 50 and 51 of title 14 shall apply. Every hospital shall pay the licensing fee to the tax administrator on or before July 14, 2008 and payments shall be made by electronic transfer of monies to the general treasurer and deposited to the general fund in accordance with section 44-50-11. Every hospital shall, on or before June 16, 2008, make a return to the tax administrator containing the correct computation of net patient services revenue for the hospital fiscal year ending September 30, 2006, and the licensing fee due upon that amount. All returns shall be signed by the hospital's authorized representative, subject to the pains and penalties of perjury.

(b) (c) For purposes of this section the following words and phrases have the following meanings:

   (1) "Hospital" means a person or governmental unit duly licensed in accordance with this chapter to establish, maintain, and operate a hospital, except a hospital whose primary service and primary bed inventory are psychiatric.

(2) "Gross patient services revenue" means the gross revenue related to patient care services.

(3) "Net patient services revenue" means the charges related to patient care services less (i) charges attributable to charity care, (ii) bad debt expenses, and (iii) contractual allowances.

(c) (d) The tax administrator shall make and promulgate any rules, regulations, and procedures not inconsistent with state law and fiscal procedures that he or she deems necessary for the proper administration of this section and to carry out the provisions, policy and purposes of this section.

(d) (e) The licensing fee imposed by this section shall be in addition to the inspection fee imposed by § 23-17-38 and to any licensing fees previously imposed in accordance with § 23-17-38.1.

SECTION 2. Title 44 of the General Laws entitled “Taxation” is hereby amended by adding thereto the following chapter:

CHAPTER 64

THE OUTPATIENT HEALTH CARE

FACILITY SURCHARGE

44-64-1. Short title. -- This chapter shall be known as "The Outpatient Health Care Facility Surcharge Act."

44-64-2. Definitions. -- The following words and phrases as used in this chapter have the following meaning:

(1) "Administrator" means the tax administrator within the department of revenue.

(2) "Gross patient revenue" means the gross amount received on a cash basis by the provider from all patient care and other gross operating income. However, charitable contributions, fund raising proceeds, and endowment support shall not be considered “gross patient revenue."

(3) "Net patient services revenue" means the charges related to patient care services less (i) charges attributable to charity care, (ii) bad debt expenses, and (iii) contractual allowances.

(4) "Person" means any individual, corporation, company, association, partnership, joint stock association, and the legal successor thereof.

(5) "Provider" means a licensed facility or operator, including a government facility or operator, subject to a surcharge under this chapter.

(6) "Surcharge" means the assessment that is imposed upon net patient revenue pursuant to this chapter.

44-64-3. Imposition of surcharge – Outpatient health care facility. -- (a) For the purposes of this section, an "outpatient health care facility" means a person or governmental unit that is licensed to establish, maintain, and operate a free-standing ambulatory surgery center or a physician ambulatory surgery center or a podiatry ambulatory surgery center, in accordance with chapter 17 of title 23.

(b) A surcharge at a rate of two percent (2.0%) shall be imposed upon the net patient services revenue received each month by every outpatient health care facility. Every provider shall pay the monthly surcharge no later than the twenty-fifth (25th) day of the month following the month that the gross patient revenue is received. This surcharge shall be in addition to any other authorized fees that have been assessed upon outpatient facilities.

44-64-4. Returns. -- (a) Every provider shall, on or before the twenty-fifth (25th) day of the month following the month that the gross patient revenue is received, make a return to the tax administrator.

(b) The tax administrator is authorized to adopt rules relative to the form of the return and the data it must contain for the correct computation of gross patient revenue and the surcharge. All returns shall be signed by the provider or its authorized representative, subject to the penalties of perjury. If a return shows an overpayment of the surcharge due, the tax administrator shall refund or credit the overpayment to the provider.

(c) The tax administrator, for good cause shown, may extend the time within which a provider is required to file a return. If the return is filed during the period of extension, no penalty or late filing charge may be imposed for failure to file the return at the time required by this chapter, but the provider shall be liable for any interest as prescribed in this chapter. Failure to file the return during the period for the extension shall make the extension null and void.

44-64-5. Set-off for delinquent payment of surcharge. -- If a provider shall fail to pay a surcharge within thirty (30) days of its due date, the tax administrator may request any agency of state government to set off the amount of the delinquency against any payment they might be due the provider from the agency and to remit any such payment to the tax administrator. Upon receipt of a request for set-off from the tax administrator, any agency of state government is authorized and empowered to set off the amount of any delinquency against any payment that is due the provider. The amount of set-off shall be credited against the surcharge due from the provider.

44-64-6. Surcharge on available information. – Interest on delinquencies – Penalties – Collection powers. -- If any provider shall fail, within the time required by this chapter, to file a return, or shall file an insufficient or incorrect return, or shall not pay the surcharge imposed by this chapter when it is due, the tax administrator shall make an assessment based upon information that may be available, which assessment shall be payable upon demand and shall bear interest from the date when the surcharge should have been paid at the annual rate set forth in section 44-1-7 of the Rhode Island general laws, as amended. If any part of the surcharge is caused by the negligence or intentional disregard of the provisions of this chapter, a penalty of ten percent (10%) of the amount of the determination shall be added to the surcharge. The tax administrator shall collect the surcharge with interest in the same manner and with the same powers as are prescribed for collection of taxes in this title.

44-64-7. Claims for refund – Hearing upon denial. -- (a) Any provider, subject to the provisions of this chapter, may file a claim for refund with the tax administrator at any time within two (2) years after the surcharge has been paid. If the tax administrator shall determine that the surcharge has been overpaid, the tax administrator shall make a refund with interest from the date of overpayment.

(b) Any provider aggrieved by an action of the tax administrator in determining the amount of any surcharge or penalty imposed under the provisions of this chapter may, within thirty (30) days after the notice of the action was mailed, apply to the tax administrator, for a hearing relative to the surcharge or penalty. The tax administrator shall fix a time and place for the hearing and shall so notify the provider.

44-64-8. Hearing by tax administrator on application. -- Following hearing, if the tax administrator upholds the assessment of the surcharge, the amount owed shall be assessed together with any penalty or interest thereon.

44-64-9. Appeals. -- Appeals from administrative orders or decisions made pursuant to any provisions of this chapter shall be to the sixth division district court pursuant to chapter 8 of title 8 of the Rhode Island general laws, as amended. The provider's right to appeal under this section shall be expressly made conditional upon prepayment of all surcharges, interest, and penalties, unless the provider moves for and is granted an exemption from the prepayment requirement, pursuant to section 8-8-26 of the Rhode Island general laws, as amended. Following the appeal, if the court determines that the provider is entitled to a refund, the provider shall also be paid interest on the refund at the rate provided in section 44-1-7.1 of the Rhode Island general laws, as amended.

44-64-10. Provider records. -- Every provider shall:

(1) keep records as may be necessary to determine the amount of its liability under this chapter;

(2) preserve those records for the period of three (3) years following the date of filing of any return required by this chapter, or until any litigation or prosecution under this chapter has been completed; and

(3) make those records available for inspection upon demand by the tax administrator or his authorized agents at reasonable times during regular business hours.

44-64-11. Method of payment and deposit of surcharge. -- (a) Payments required by this chapter may be made by electronic transfer of monies to the general treasurer for deposit in the general fund.

(b) The general treasurer is authorized to establish necessary accounts and to take all steps necessary to facilitate the electronic transfer of monies. The general treasurer shall provide the tax administrator a record of any such monies transferred and deposited.

44-64-12. Rules and regulations. -- The tax administrator is authorized to promulgate all necessary rules, regulations, and procedures, not inconsistent with state law and fiscal procedures, for the proper administration of this chapter and in order to carry out the provisions, policy, and purposes of this chapter.

44-64-13. Severability. -- If any provision of this chapter or the application of this chapter to any person or circumstances is held invalid, that invalidity shall not affect other provisions or applications of the chapter that can be given effect without the invalid provision or application, and to this end the provisions of this chapter are declared to be severable.

SECTION 3. Title 44 of the General Laws entitled "TAXATION" is hereby amended by adding thereto the following chapter:

CHAPTER 65

IMAGING SERVICES SURCHARGE

44-65-1. Short title. -- This chapter shall be known as "The Imaging Services Surcharge Act."

44-65-2. Definitions. -- The following words and phrases as used in this chapter have the following meaning:

(1) "Administrator" means the tax administrator within the department of administration.

(2) "Gross patient revenue" means the gross amount received on a cash basis by a provider from all income derived from the provision of imaging services to patients. Charitable contributions, fundraising proceeds, and endowment support shall not be considered as "gross patient revenue."

(3) "Net patient services revenue" means the charges related to patient care services less (i) charges attributable to charity care, (ii) bad debt expenses, and (iii) contractual allowances.

(4) "Imaging services" means and includes all the professional and technical components of x-ray, ultrasound (including echocardiography), computed tomography (CT), magnetic resonance imaging (MRI), positron emission tomography (PET), positron emission tomography/computed tomography (PET/CT), general nuclear medicine, and bone densitometry procedures.

(5) "Person" means any individual, corporation, company, association, partnership, joint stock association, and the legal successor thereof.

(6) "Provider" means any person who furnishes imaging services for the purposes of patient diagnosis, assessment or treatment, excluding any person licensed as a hospital or a rehabilitation hospital center or a not-for-profit organization ambulatory care facility, pursuant to the provisions of chapter 17 of title 23 of the Rhode Island general laws, as amended or not performing more than two hundred (200) radiological procedures per month. Further, the term "provider" shall not apply to any person subject to the provisions of chapter 64 of title 44 or to any person licensed in the state of Rhode Island as a dentist or a podiatrist or a veterinarian.

(7) "Surcharge" means the assessment imposed upon net patient revenue pursuant to this chapter.

44-65-3. Imposition of surcharge. -- A surcharge shall be imposed upon the net patient revenue received by every provider in each month at a rate of two percent (2.0%). Every provider shall pay the monthly surcharge no later than the twenty-fifty (25^th) day of each month following the month of receipt of net patient services revenue. This surcharge shall be in addition to any other fees or assessments upon the provider allowable by law.

44-65-4. Returns. -- (a) Every provider shall on or before the twenty-fifty (25^th) day of the month following the month of receipt of gross patient revenue make a return to the tax administrator.

(b) The tax administrator is authorized to adopt rules, pursuant to this chapter, relative to the form of the return and the data that it must contain for the correct computation of gross patient revenue and the surcharge upon the amount. All returns shall be signed by the provider or by its authorized representative, subject to the pains and penalties of perjury. If a return shows an overpayment of the surcharge due, the tax administrator shall refund or credit the overpayment to the provider.

(c) The tax administrator, for good cause shown, may extend the time within which a provider is required to file a return, and if the return is filed during the period of extension no penalty or late filing charge may be imposed for failure to file the return at the time required by this chapter, but the provider shall be liable for interest as prescribed in this chapter. Failure to file the return during the period for the extension shall void the extension.

44-65-5. Set-off for delinquent payment of surcharge. -- If a provider shall fail to pay a surcharge within thirty (30) days of its due date, the tax administrator may request any agency of state government making payments to the provider to set-off the amount of the delinquency against any payment due the provider from the agency of state government and remit the sum to the tax administrator. Upon receipt of the set-off request from the tax administrator, any agency of state government is authorized and empowered to set-off the amount of the delinquency against any payment or amounts due the provider. The amount of set-off shall be credited against the surcharge due from the provider.

44-65-6. Surcharge on available information -- Interest on delinquencies -- Penalties -- Collection powers. -- If any provider shall fail to file a return within the time required by this chapter, or shall file an insufficient or incorrect return, or shall not pay the surcharge imposed by this chapter when it is due, the tax administrator shall assess upon the information as may be available, which shall be payable upon demand and shall bear interest at the annual rate provided by section 44-1-7 of the Rhode Island general laws, as amended, from the date when the surcharge should have been paid. If any part of the surcharge made is due to negligence or intentional disregard of the provisions of this chapter, a penalty of ten percent (10%) of the amount of the determination shall be added to the tax. The tax administrator shall collect the surcharge with interest in the same manner and with the same powers as are prescribed for collection of taxes in this title.

44-65-7. Claims for refund -- Hearing upon denial. -- (a) Any provider, subject to the provisions of this chapter, may file a claim for refund with the tax administrator at any time within two (2) years after the surcharge has been paid. If the tax administrator shall determine that the surcharge has been overpaid, he or she shall make a refund with interest from the date of overpayment.

(b) Any provider whose claim for refund has been denied may, within thirty (30) days from the date of the mailing by the administrator of the notice of the decision, request a hearing and the administrator shall, as soon as practicable, set a time and place for the hearing and shall notify the provider.

44-65-8. Hearing by tax administrator on application. -- Any provider aggrieved by the action of the tax administrator in determining the amount of any surcharge or penalty imposed under the provisions of this chapter may apply to the tax administrator, within thirty (30) days after the notice of the action is mailed to it, for a hearing relative to the surcharge or penalty. The tax administrator shall fix a time and place for the hearing and shall so notify the provider. Upon the hearing the tax administrator shall correct manifest errors, if any, disclosed at the hearing and thereupon assess and collect the amount lawfully due together with any penalty or interest thereon.

44-65-9. Appeals. -- Appeals from administrative orders or decisions made pursuant to any provisions of this chapter shall be to the sixth division district court pursuant to chapter 8 of title 8 of the Rhode Island general laws, as amended. The provider's right to appeal under this section shall be expressly made conditional upon prepayment of all surcharges, interest, and penalties unless the provider moves for and is granted an exemption from the prepayment requirement pursuant to section 8-8-26 of the Rhode Island general laws, as amended. If the court, after appeal, holds that the provider is entitled to a refund, the provider shall also be paid interest on the amount at the rate provided in section 44-1-7.1 of the Rhode Island general laws, as amended.

44-65-10. Provider records. -- Every provider shall:

(1) Keep records as may be necessary to determine the amount of its liability under this chapter.

(2) Preserve those records for the period of three (3) years following the date of filing of any return required by this chapter, or until any litigation or prosecution under this chapter is finally determined.

(3) Make those records available for inspection by the administrator or his/her authorized agents, upon demand, at reasonable times during regular business hours.

44-65-11. Method of payment and deposit of surcharge. -- (a) The payments required by this chapter may be made by electronic transfer of monies to the general treasurer and deposited to the general fund.

(b) The general treasurer is authorized to establish an account or accounts and to take all steps necessary to facilitate the electronic transfer of monies. The general treasurer shall provide the tax administrator a record of any monies transferred and deposited.

44-65-12. Rules and regulations. -- The tax administrator is authorized to make and promulgate rules, regulations, and procedures not inconsistent with state law and fiscal procedures as he or she deems necessary for the proper administration of this chapter and to carry out the provisions, policies, and purposes of this chapter.

44-65-13. Severability. -- If any provision of this chapter or the application of this chapter to any person or circumstances is held invalid, that invalidity shall not affect other provisions or applications of the chapter that can be given effect without the invalid provision or application, and to this end the provisions of this chapter are declared to be severable.

SECTION 4. Section 1 shall take effect on July 1, 2007 and shall apply to hospitals, as defined in Section 1, which are duly licensed on July 1, 2007. The licensing fee imposed by Section 1 shall be in addition to the inspection fee imposed by § 23-17-38 and to any licensing fees previously imposed in accordance with § 23-17-38.1. The remainder of the article shall take effect upon passage.