Committee advances tax-credit program to encourage donations to rural hospitals; substitute and technical amendments adopted

Representative Collins presented a substitute for House Bill 86 to create a donor-credit program intended to support rural hospitals. The committee adopted two technical amendments from Revenue and Utilities and approved the bill as amended by voice vote.

Under the substitute described in committee, the bill would create a rural hospital development board (the sponsor said nine members in the substitute) to establish eligibility and participation rules. The substitute would permit taxpayers to claim state income tax credits, financial institution excise tax credits, insurance premium tax credits or utility tax credits for qualified donations to eligible rural hospitals. Credits are not transferable or refundable but may be carried forward for three consecutive years, the sponsor said.

Sponsor Representative Collins described caps and limits included in the substitute: a per-donor limit of $15,000 for an individual and $450,000 for a pass-through entity; an overall program cap that the sponsor said would be $20,000,000 in the first year, $25,000,000 in the second year and $30,000,000 thereafter (the transcript's later date references were garbled in the available excerpt). The substitute also set maximum amounts a single rural hospital could receive in early program years — $750,000 in 2026, $1,000,000 in 2027 and $1,250,000 thereafter, as recited in committee — and the sponsor said hospitals must submit five-year sustainability plans demonstrating how funds would support long-term viability.

The substitute allows hospital employees to make payroll-deduction donations to the program. Representative Collins told the committee the substitute was patterned in part after Georgia’s program, which he said has produced cases of hospitals becoming financially sustainable after receiving similar support.

Two technical amendments were adopted on the record. One amendment, offered by the Department of Revenue, clarified treatment of qualified electing pass-through entities and pro rata allocation of donations. The other clarified a utilities-related provision and tightened language about certification by recipients upon receipt of donations. Representative Chestnut asked who recommended the last-minute amendments; the sponsor said Revenue and Utilities had submitted them.

Committee discussion touched on whether the program would relieve pressure on urban emergency departments; supporters said they believed it would help, and multiple members from urban and rural districts voiced support for preserving local hospital services. The committee adopted the substitute and amendments by voice votes.

Committee discussion included fiscal context: the sponsor said the program would be split roughly half from the Education Trust Fund and half from the General Fund under the credit structure, though committee members said they did not have a precise breakdown. The transcript recorded the sponsor's estimate of the caps but did not include a comprehensive fiscal projection reconciling revenue sources and long-term effects.

Representative Wood moved to adopt the substitute and give the bill a favorable report; Representative Baker seconded. The motion passed by voice vote.