07 LC 28
3445
House
Bill 404
By:
Representative Channell of the
116th
A
BILL TO BE ENTITLED
AN ACT
AN ACT
To
amend Titles 33 and 48 of the Official Code of Georgia Annotated, relating,
respectively, to insurance and revenue and taxation, so as to provide for
additional exemptions for certain health plans with respect to state and local
insurance premium taxes; to provide for related matters; to provide for a sales
tax exemption for a limited period of time with respect to certain sales of
tangible personal property or services to a qualified small business; to provide
that the taxable net income of any taxpayer of this state shall not include
premiums paid for high deductible health plans established and used with a
health savings account; to provide for income tax credits with respect to
certain qualified health insurance expenses or certain contributions related
thereto; to provide for an income tax credit with respect to qualified health
information technology expenses; to provide for procedures, conditions, and
limitations; to provide for powers, duties, and authority of the state revenue
commissioner with respect to the foregoing; to provide for the obtaining and
maintaining of certain creditable health insurance coverage as a condition of
claiming certain exemptions and receiving refunds; to require certain
individuals to prove ability to pay for medical expenses; to provide for escrow
accounts for such individuals; to provide for alternate bonding requirements; to
provide for other matters relative to the foregoing; to provide effective dates;
to provide for applicability; to provide for an automatic repeals under certain
circumstances; to repeal conflicting laws; and for other purposes.
BE
IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION
1.
Title
33 of the Official Code of Georgia Annotated, relating to insurance, is amended
by adding a new subsection (c) in Code Section 33-8-4, relating to amount and
method of computing tax on insurance premiums generally, to read as
follows:
"(c)
Insurers shall be exempt from otherwise applicable state premium taxes as
provided for in subsection (a) of this Code section on premiums paid by Georgia
residents for high deductible health plans sold or maintained in connection with
a health savings account under the applicable provisions of Section 223 of the
Internal Revenue Code."
SECTION
2.
Said
title is further amended by adding a new subsection (a.1) in Code Section
33-8-8.2, relating to amount and method of computing local insurance premium
taxes on insurance companies other than life insurance companies, to read as
follows:
"(a.1)
Insurers shall be exempt from otherwise applicable local premium taxes as
provided for in subsection (a) of this Code section on premiums paid by Georgia
residents for high deductible health plans sold or maintained in connection with
a health savings account under the applicable provisions of Section 223 of the
Internal Revenue Code."
SECTION
3.
Title
48 of the Official Code of Georgia Annotated, relating to revenue and taxation,
is amended by adding a new paragraph in subsection (a) of Code Section 48-7-27,
relating to computation of taxable net income, to read as follows:
"(13.1)
An amount equal to 100 percent of the premium paid by the taxpayer during the
taxable year for high deductible health plans established and used with a health
savings account under the applicable provisions of Section 223 of the Internal
Revenue Code to the extent the deduction has not been included in federal
adjusted gross income, as defined under the Internal Revenue Code of 1986, and
the expenses have not been included in itemized nonbusiness
deductions;".
SECTION
4.
Said
title is further amended by adding new Code sections to read as
follows:
"48-7-29.13.
(a)
As used in this Code section, the term:
(1)
'Qualified health insurance expense' means the expenditure of funds for health
insurance premiums for high deductible health plans that include, at a minimum,
catastrophic health care coverage which are established and used with a health
savings account under the applicable provisions of Section 223 of the Internal
Revenue Code.
(2)
'Taxpayer' means an employer who employs directly, or who pays compensation to
individuals which compensation is reported on Form 1099, 25 or fewer
persons.
(b)
A taxpayer which does not provide health care coverage shall be allowed a credit
against the tax imposed by Code Section 48-7-20 or 48-7-21 for contributions to
the health savings account of an employee or compensated individual who incurs
qualified health insurance expenses in an amount not to exceed the actual amount
contributed to all participating employees or compensated individuals or
$500.00, whichever is less, if such contributions are made available to all of
its employees and compensated individuals.
(c)
In no event shall the total amount of the tax credit under this Code section for
a taxable year exceed the taxpayer´s income tax liability. Any unused tax
credit shall be allowed the taxpayer against succeeding years´ tax
liability. No such credit shall be allowed the taxpayer against prior
years´ tax liability.
(d)
The commissioner shall be authorized to promulgate any rules and regulations
necessary to implement and administer the provisions of this Code
section.
48-7-29.14.
(a)
As used in this Code section, the term:
(1)
'Qualified health insurance expense' means the expenditure of funds for health
insurance premiums for high deductible health plans that include, at a minimum,
catastrophic health care coverage, which are established and used with a health
savings account under the applicable provisions of Section 223 of the Internal
Revenue Code.
(2)
'Taxpayer' means an employee who is employed directly or a person who is paid
compensation which is reported on Form 1099 at a business where 25 or fewer
persons are employed or compensated by the employer.
(b)
A taxpayer shall be allowed a credit against the tax imposed by Code Section
48-7-20 for qualified health insurance expenses in an amount not to exceed the
actual amount expended or $250.00, whichever is less, if such health insurance
is made available to all of the employees and compensated individuals of the
employer.
(c)
In no event shall the total amount of the tax credit under this Code section for
a taxable year exceed the taxpayer´s income tax liability. Any unused tax
credit shall be allowed the taxpayer against succeeding years´ tax
liability. No such credit shall be allowed the taxpayer against prior
years´ tax liability.
(d)
The commissioner shall be authorized to promulgate any rules and regulations
necessary to implement and administer the provisions of this Code
section."
SECTION
5.
Said
title is further amended by adding a new Code section to read as
follows:
"48-7-29.15.
(a)
As used in this Code section, the term:
(1)
'Qualified health information technology expense' means the expenditure of funds
by a taxpayer for health information technology hardware or software used
directly in the establishment and maintenance of electronic medical records
accessible at a website established by the Department of Community Health
pursuant to Code Section 26-4-80 or 31-33-9.
(2)
'Taxpayer' means a physician, pharmacy, hospital, ambulatory surgical center,
nursing home, or assisted living facility which incurs qualified health
information technology expenses.
(b)
A taxpayer shall be allowed a credit against the tax imposed by Code Section
48-7-20 or 48-7-21 for qualified health information technology expenses in an
amount not to exceed the actual amount expended or $5,000.00, whichever is
less.
(c)
In no event shall the total amount of the tax credit under this Code section for
a taxable year exceed the taxpayer´s income tax liability. Any unused tax
credit shall be allowed the taxpayer against succeeding years´ tax
liability. No such credit shall be allowed the taxpayer against prior
years´ tax liability.
(d)
The commissioner shall be authorized to promulgate any rules and regulations
necessary to implement and administer the provisions of this Code
section.
(e)
This Code section shall be repealed by operation of law on January 1,
2009."
SECTION
6.
Said
title is further amended by adding a new Article 8 to Chapter 7 to read as
follows:
"ARTICLE
8
48-7-190.
(a)
Effective January 1, 2008, the following individuals who are over the age of 18
and have not yet attained the age of 65 and whose annual gross income exceeds
300 percent of the federal poverty level for the immediately preceding calendar
year shall offer proof of their ability to pay for medical care for themselves
and their dependents:
(1)
Residents of Georgia; or
(2)
Within 63 days of establishing residency, individuals who become residents of
Georgia.
(b)
Individuals subject to the requirement in subsection (a) of this Code section
shall be deemed to be in compliance with said requirement if they:
(1)
Indicated coverage under any health benefit plan in accordance with Code
Section 33-62-13;
(2)
Demonstrate proof of financial security in accordance with subsection (c) of
this Code section; or
(3)
Demonstrate proof of coverage under a high deductible major medical health
insurance plan that provides a minimum of $10,000.00 in benefits.
(c)
Pursuant to paragraph (2) of subsection (b) of this Code Section, individuals
electing to demonstrate proof of financial security to pay for medical
expenditures shall present to the commissioner of revenue a bond in the amount
of $10,000.00 or shall deposit with the commissioner of revenue $10,000.00 in an
escrow account that shall bear interest at a rate established by the
commissioner of revenue.
(d)
If, in any tax year, an individual subject to the requirement in subsection (a)
of this Code section fails to comply with such requirement and is required to
file a return under Article 2 of this chapter, such individual shall not be
allowed to claim and receive on such return any personal exemptions specified
under Code Section 48-7-26 nor shall such individual be allowed to claim any
medical expenses as itemized deductions on such return.
(e)
With respect to any escrow account established in accordance with this Code
section by reason of an individual´s making the election specified in
subsection (c) of this Code section:
(1)
The amount deposited, retained, or collected shall not exceed $10,000.00 in the
aggregate for any such individual;
(2)
Nothing in this Code section shall be construed to authorize the commissioner of
revenue to retain any amount for such purposes that otherwise would be paid to a
claimant agency or agencies of the State of Georgia as debts;
(3)
Moneys shall be disbursed by the commissioner of revenue only to pay for medical
claims for health care services provided to the individual during the period
when the individual was not in compliance with subsection (a) of this Code
section;
(4)
The commissioner of revenue shall close the account and remit the remaining
funds to the individual within 90 days of receiving notification that the
individual has:
(A)
Elected to comply with the requirement of subsection (a) of this Code section by
submitting proof of insurance coverage in accordance with paragraph (1) of
subsection (b) of this Code section; or
(B)
Is no longer subject to subsection (a) of this Code section by reason of no
longer being a resident of this state; and
(5)
If the commissioner of revenue determines that an individual for whom an account
has been established has not been a resident of this state for a consecutive
period of 36 months or more, the commissioner of revenue shall close the account
and remit the remaining funds to the individual or, if the commissioner of
revenue cannot locate the individual, shall dispose of the funds in accordance
with the provisions of law concerning unclaimed property."
SECTION
7.
Said
title is further amended in Code Section 48-8-3, relating to exemptions from
sales and use tax, by replacing "; or" at the end of paragraph (84) with a
semicolon; by replacing the period at the end of paragraph (85) with "; or"; and
by adding a new paragraph to read as follows:
"(86)(A)
For the period commencing January 1, 2008, and ending on December 31, 2011,
sales of tangible personal property or services to a qualified small
business.
(B)
As used in this paragraph, the term 'qualified small business' means any small
business located in this state which qualifies for and receives the state income
tax credit with respect to qualified health insurance expenses pursuant to Code
Section 48-7-29.13.
(C)
Any person making a sale of tangible personal property or services to a
qualified small business shall collect the tax imposed on this sale unless the
purchaser furnishes such person with an exemption determination letter issued by
the commissioner certifying that the purchaser is entitled to purchase the
tangible personal property or services without paying the tax.
(D)
The commissioner is authorized to promulgate rules and regulations deemed
necessary in order to administer and effectuate this
paragraph."
SECTION
8.
This
Act shall become effective on January 1, 2008, and Sections 4 and 5 of this Act
shall be applicable to all taxable years beginning on or after January 1, 2008,
and Section 6 of this Act shall be applicable to all taxable years beginning on
and after January 1, 2009.
SECTION
9.
All
laws and parts of laws in conflict with this Act are repealed.