North Carolina HB 1297: Malpractice Insurance Tax Credit.

Bill Text

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2003
H 1
HOUSE BILL 1297

Short Title: Malpractice Insurance Tax Credit. (Public)
Sponsors: Representatives Glazier, Dickson, Jones (Primary Sponsors); Bordsen,
Gibson, LaRoque, and McLawhorn.
Referred to: Rules, Calendar, and Operations of the House.
May 15, 2003

A BILL TO BE ENTITLED 1
AN ACT TO PROVIDE A TAX CREDIT FOR MEDICAL CARE PROVIDERS TO 2
THE EXTENT THEIR MALPRACTICE INSURANCE PREMIUMS EXCEED AN 3
APPROPRIATE AMOUNT. 4
The General Assembly of North Carolina enacts: 5
SECTION 1. Article 3B of Chapter 105 of the General Statutes is amended 6
by adding a new section to read: 7
"§ 105-129.16D. Credit for medical malpractice insurance expenses. 8
(a) Distressed Area Practitioners. – A medical care provider that provides 9
medical care services in this State and provides at least seventy-five percent (75%) of 10
the services in tier one, two, or three enterprise areas is allowed a credit equal to either 11
of the following, at the option of the taxpayer: 12
(1) Ten percent (10%) of the amount by which the taxpayer's annual 13
medical liability insurance premiums for the taxable year exceed 14
twenty thousand dollars ($20,000) per practitioner covered by the 15
insurance. 16
(2) Twenty percent (20%) of the amount by which the taxpayer's annual 17
medical liability insurance premiums for the taxable year exceed sixty 18
thousand dollars ($60,000) per practitioner covered by the insurance. 19
(b) Other Practitioners. – A medical care provider that provides medical care 20
services in this State and provides less than seventy-five percent (75%) of the services 21
in tier one, two, or three enterprise areas is allowed a credit equal to either of the 22
following, at the option of the taxpayer: 23
(1) Five percent (5%) of the amount by which the taxpayer's annual 24
medical liability insurance premiums for the taxable year exceed thirty 25
thousand dollars ($30,000) per practitioner covered by the insurance. 26
(2) Ten percent (10%) of the amount by which the taxpayer's annual 27
medical liability insurance premiums for the taxable year exceed 28

GENERAL ASSEMBLY OF NORTH CAROLINA SESSION 2003
Page 2 House Bill 1297-First Edition
seventy thousand dollars ($70,000) per practitioner covered by the 1
insurance. 2
(c) Allocation. – If the taxpayer is an individual who is a nonresident or a 3
part-year resident, the taxpayer must reduce the amount of the credit by multiplying it 4
by the fraction calculated under G.S. 105-134.5(b) or (c), as appropriate. If the taxpayer 5
is not an individual and is required to apportion its multistate business income to this 6
State, the taxpayer must reduce the amount of the credit by multiplying it by the 7
apportionment fraction used to apportion its business income to this State. 8
(d) Definitions. – The following definitions apply in this section: 9
(1) Annual medical liability insurance premiums. – The actual amount of 10
insurance premiums paid by the taxpayer during the taxable year for 11
medical malpractice insurance coverage under a claims-made 12
malpractice insurance policy and for tail insurance. 13
(2) Claims-made malpractice insurance policy. – A medical malpractice 14
liability insurance policy that covers claims that satisfy all of the 15
following conditions: 16
a. Are reported during the policy period. 17
b. Meet the provisions specified by the policy. 18
c. Are for an incident that occurred during the policy period or 19
occurred before the policy period, as specified by the policy. 20
(3) Enterprise tier. – Defined in G.S. 105-129.2. 21
(4) Medical care provider. – Either of the following: 22
a. A practitioner. 23
b. A professional corporation, professional limited liability 24
company, or partnership authorized by law to provide medical 25
care services in the regular course of business or practice of a 26
profession. 27
(5) Medical care services. – The practice of medicine, surgery, and 28
nursing as regulated by Chapter 90 of the General Statutes. 29
(6) Practitioner. – A physician, physician's assistant, or nurse authorized 30
by Chapter 90 of the General Statutes to provide medical services in 31
the regular course of business or practice of a profession. 32
(7) Tail insurance. – Insurance that covers a medical care provider insured 33
once a claims-made malpractice insurance policy is canceled, not 34
renewed, or terminated and that covers claims made or asserted after 35
the cancellation or termination for acts relating to the provision of 36
medical care services by the medical care provider occurring during 37
the period the prior malpractice insurance was in effect." 38
SECTION 2. This act becomes effective for taxable years beginning on or 39
after January 1, 2005. 40