BILL NUMBER: AB 2659 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MARCH 24, 2014
INTRODUCED BY Assembly Member Brown
FEBRUARY 21, 2014
An act to add and repeal Chapter 12.9 (commencing with
Section 7091) to of Division 7 of Title
1 of the Government Code, and to add and
repeal Section 17057.8 to of the
Revenue and Taxation Code, and to add and repeal Section
14105.197 of the Welfare and Institutions Code, relating to
health access zones.
LEGISLATIVE COUNSEL'S DIGEST
AB 2659, as amended, Brown. Health Access Zones: income tax:
credits.
Existing law establishes the Office of Statewide Health Planning
and Development and requires the office to perform various duties,
including preparing a Health Manpower Plan for California, which
includes establishing appropriate standards for determining the
adequacy of supply in the state of specified categories of certain
health personnel. Existing law establishes the California Healthcare
Workforce Policy Commission to, in part, identify areas of the state
where unmet priority needs for dentists, physicians, and registered
nurses exist.
This bill would require the Director of Statewide Health Planning
and Development and the commission to adopt regulations relating to
the designation of health access zones, as defined, for the purpose
of targeting state resources to reduce health disparities, increase
access to primary care for the state's growing Medi-Cal population,
improve health outcomes, and reduce health care costs and hospital
admissions and readmissions in certain parts of the state. The bill
would require the director and the commission to begin accepting
applications by from nonprofit
community-based organizations and local government agencies for
health access zone designation no later than July 1, 2015, and would
require the director and the commission to designate areas as health
access zones in accordance with specified criteria. The bill would
also authorize the director and the commission to issue grants to the
nonprofit community-based organizations, local government agencies,
and health access zone practitioners, as defined, for specified
purposes. The bill would create the Health Access Zone Reserve Fund,
which would consist of moneys appropriated by the Legislature, to be
used, upon appropriation of the Legislature, by the director and the
commission for these purposes. The bill would repeal these
provisions on January 1, 2021.
The Personal Income Tax Law authorizes various credits against the
tax imposed by that law.
This bill would, for taxable years beginning on or after January
1, 2016, and before January 1, 2021, allow a credit
against that tax in an amount equal to $5,000 for each net increase
in qualified full-time health access zone employees, as defined,
hired during the taxable year by a qualified health access zone
employer, as defined.
Existing law provides for the Medi-Cal program, which is
administered by the State Department of Health Care Services, under
which qualified low-income individuals receive health care services.
The Medi-Cal program is, in part, governed and funded by federal
Medicaid Program provisions. Existing federal law requires the state
to provide payment for primary care services furnished in the 2013
and 2014 calendar years by Medi-Cal providers with specified primary
specialty designations at a rate not less than 100% of the payment
rate that applies to those services and physicians under the Medicare
Program.
This bill would require, notwithstanding any other law, that
payment for primary care services provided on or before December 31,
2020, by a physician in an area designated as a health access zone be
made at the payment rate that applies under those provisions.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares all of the
following:
(a) Shortages of physicians and other health professionals in
underserved areas significantly affect the health of racial and
ethnic minorities.
(b) Members of racial and ethnic minority groups are
overrepresented among the 56 million people in the United States who
have inadequate access to a primary care physician.
(c) There are marked differences in social determinants, such as
poverty, low socioeconomic status, and lack of access to care, that
exist along racial and ethnic lines and these differences can
contribute to poor health outcomes.
(d) While many state and federal programs continue to attempt to
reduce racial and ethnic disparities in quality of and access to
care, significant disparities continue to persist.
(e) Strengthening California's health and human services
infrastructure involves addressing the critical shortage of primary
care physicians, nurses, behavioral health providers, long-term care
workers, and community health workers.
SEC. 2. Chapter 12.9 (commencing with Section 7091) is added to
Division 7 of Title 1 of the Government Code, to read:
CHAPTER 12.9. CALIFORNIA HEALTH CARE ACCESS INITIATIVE
7091. For purposes of this chapter, the following definitions
shall apply:
(a) "Area" means a contiguous geographic area that meets both of
the following:
(1) Demonstrates measurable and documented health disparities and
poor health outcomes.
(2) Is small enough to allow for the incentives offered under this
chapter to have a significant impact on improving health outcomes,
reducing health disparities, including racial and ethnic and
geographic disparities, and serving the Medi-Cal population.
(b) "Commission" means the California Healthcare Workforce Policy
Commission within the Office of Statewide Health Planning and
Development.
(c) "Director" means the Director of Statewide Health Planning and
Development.
(d) "Fund" means the Health Access Zone Reserve Fund established
in Section 7099.
(e) "Health access zone" means a contiguous geographic area that
meets all of the following:
(1) Demonstrates measurable and documented health disparities and
poor health outcomes.
(2) Is small enough to allow for the incentives offered under this
chapter to have a significant impact on improving health outcomes,
reducing health disparities, including racial and ethnic and
geographic disparities, and serving the Medi-Cal population.
(3) Is designated as a health access zone by the commission and
the director in accordance with this chapter.
(f) "Health access zone practitioner" means a person who is
licensed under Division 2 (commencing with Section 500) of the
Business and Professions Code and who provides any of the following:
(1) Primary care, including obstetrics, gynecological services,
pediatric services, or geriatric services.
(2) Behavioral health services, including mental health and
alcohol and substance abuse services.
(3) Dental services.
7092. It is the intent of the Legislature in enacting this
chapter to establish health access zones to target state resources to
reduce health disparities, increase access to primary care for our
state's growing Medi-Cal population, improve health outcomes, and
reduce health care costs and hospital admissions and readmissions in
specific areas of the state.
7093. (a) The director and the commission may adopt regulations
to implement this chapter and to specify eligibility criteria,
application, approval, and monitoring processes for participants. The
director and the commission shall consult with the Office of Health
Equity within the State Department of Public Health in implementing
this chapter.
(b) (1) In order for an area to be designated as a health access
zone, a nonprofit community-based organization or a local government
agency shall apply to the director on behalf of the area to receive
designation. The application shall be in the form and manner and
contain the information required as determined by the commission and
the director.
(2) The director and the commission shall begin accepting
applications for health access zone designation no later than July 1,
2015.
(c) An application submitted pursuant to subdivision (b) shall
include an effective and sustainable plan to reduce health
disparities, reduce costs or produce savings in the health care
system, and improve health outcomes that includes both of the
following:
(1) A description of the plan of the nonprofit community-based
organization or local government agency to utilize funding available
under this chapter to address health care provider capacity, improve
health services delivery, effectuate community improvements, or
conduct outreach and education efforts.
(2) A proposal to use funding available under this chapter to
provide for loan repayment incentives to induce health access zone
practitioners to practices in the area.
(d) An application submitted pursuant to subdivision (b) may also
include the use of other benefits, including, but not limited to, any
of the following:
(1) Tax credits, including, but not limited to, those available
under Section 17057.8 of the Revenue and Taxation Code to encourage
health access zone practitioners to establish or expand health care
practices in the area.
(2) A proposal to use innovative public health strategies to
reduce health disparities in the areas, including the use of
community health workers, registered dieticians, optometrists, peer
learning, and community-based disease management activities, that
could be supported by grants awarded under this chapter.
(3) A proposal to use other incentives or mechanisms to address
health disparities that focus on ways to expand access to care,
expand access to fresh produce through grocery stores and farmer's
markets, promote hiring, and reduce costs to the health care system.
7094. (a) The director and the commission shall designate areas
as health access zones in accordance with this section.
(b) The director and the commission shall consider geographic
diversity, among other factors, when designing areas as health access
zones, and the commission may conduct outreach efforts to facilitate
a geographically diverse pool of applicants, including promoting
applications from rural areas.
(c) After receiving applications, the director and the commission
shall report to the Assembly Committee on Budget and the Senate
Committee on Budget and Fiscal Review the names of the applicants and
geographic areas in which the applicants are located.
(d) The director and the commission may limit the number of areas
designated as health access zones based on the amount of money
appropriated by the Legislature to the fund.
(e) The director and the commission shall give priority to
applications that demonstrate all of the following:
(1) Support from and participation of key stakeholders in the
public and private sectors, including residents of the area and local
government.
(2) A plan for long-term funding and sustainability.
(3) Inclusion of supporting funds from the private sector.
(4) A plan for evaluation of the impact of designation of the
proposed area as a health access zone.
(5) Other factors that the director and the commission determine
are appropriate to demonstrate a commitment to reduce disparities and
improve outcomes and provide access to health care to Medi-Cal
beneficiaries.
7095. Health access zone practitioners that practice in a health
access zone may receive both the following:
(a) A tax credit allowed under Section 17057.8 of the Revenue and
Taxation Code, for hiring other health professionals, including, but
not limited to, nurses or physician assistants, licensed or certified
under Division 2 (commencing with Section 500) of the Business and
Professions Code, if the health access zone practitioner receives a
certification of eligibility as described in Section 7097 and meets
the other requirements in Section 17057.8 of the Revenue and Taxation
Code.
(b) Priority for the receipt of any state funding available for
electronic health records, if feasible and if other standards for
receipt of the funding are met.
7096. (a) A nonprofit community-based organization or a local
government agency that applies on behalf of an area for designation
as a health access zone may receive grants, as determined by the
director and the commission, to implement actions outlined in the
organization's or agency's application to improve health outcomes and
reduce health disparities in the health access zone.
(b) A health access zone practitioner may apply to the director
and the commission for a grant to defray the cost of capital or
leasehold improvements to, or medical or dental equipment to be used
in, the health access zone.
(1) To qualify for a grant under this section, a health access
zone practitioner shall meet both of the following requirements:
(A) Own or lease the health care facility.
(B) Provide health care from that facility.
(2) A grant to defray the cost of medical or dental equipment
shall not exceed the lesser of twenty-five thousand dollars ($25,000)
or 50 percent of the cost of the equipment.
(3) Grants for capital or leasehold improvements shall be for the
purposes of improving or expanding the delivery of health care in the
health access zone.
7097. (a) A health care access practitioner may request from the
director and the commission a certification of eligibility for the
tax credits under Section 17053.8 17057.8
of the Revenue and Taxation Code.
(b) The director and the commission shall issue a certification of
eligibility of the tax credits under Section 17057.8 of the Revenue
and Taxation Code if the health access zone practitioner meets all of
the following:
(1) He or she practices in the health access zone.
(2) He or she demonstrates competency in cultural, linguistic, and
health literacy in a manner determined by the department.
(3) He or she accepts and provides care for patients who are
enrolled in Medi-Cal or are uninsured.
(4) He or she meets other factors that the director and the
commission determine are appropriate to demonstrate a commitment to
reduce health disparities and improve outcomes and provide access to
health care to Medi-Cal beneficiaries.
(c) The health access zone practitioner shall retain a copy of the
certification.
7098. (a) Notwithstanding Section 10231.5 of the Government Code,
and on or before December 31 of each year, the director and the
commission shall submit a report to the Governor and the Legislature
that includes all of the following:
(1) The number and types of incentives granted to each health
access zone.
(2) Evidence of the impact of the tax credits and loan repayment
incentives in attracting health access zone practitioners to health
access zones.
(3) Evidence of the impact of the incentives offered in health
access zones in reducing health disparities and improving health
outcomes.
(4) Evidence of progress in reducing health costs and hospital
admissions and readmissions in health access zones.
(b) A report submitted by the director and the commission pursuant
to subdivision (a) shall be submitted in compliance with Section
9795 of the Government Code.
7099. (a) There is hereby established in the State Treasury the
Health Access Zone Reserve Fund consisting of moneys appropriated to
the fund by the Legislature.
(b) Moneys in the fund shall be used, upon appropriation of the
Legislature, by the director and the commission for purposes of
implementing this chapter.
7100. This chapter shall remain in effect only until January 1,
2021, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2021, deletes or extends
that date.
SEC. 3. Section 17057.8 is added to the Revenue and Taxation Code,
to read:
17057.8. (a) For each taxable year beginning on or after January
1, 2016, and before January 1, 2021, there shall be
allowed as a credit against the "net tax," as defined in Section
17039, an amount equal to five thousand dollars ($5,000) for each net
increase in qualified full-time health access zone employees hired
during the taxable year by a qualified health access zone employer.
(b) For purposes of this section:
(1) "Annual full-time equivalent" means either of the following:
(A) In the case of a full-time employee paid hourly qualified
wages, "annual full-time equivalent" means the total number of hours
worked for the qualified health access zone employer by the employee
(not to exceed 2,000 hours per employee) divided by 2,000.
(B) In the case of a salaried full-time employee, "annual
full-time equivalent" means the total number of weeks worked for the
qualified health access zone employer by the employee divided by 52.
(2) "Health access zone" has the same meaning as that term is
defined in subdivision (g) (e) of
Section 7091 of the Government Code.
(3) "Qualified full-time health access zone employee" means an
individual who meets all of the following requirements:
(A) Is a health professional licensed or certified under Division
2 (commencing with Section 500) of the Business and Professions Code,
such as, but not limited to, a nurse or physician assistant.
(B) Performs 100 percent of his or her services for the qualified
health access zone employer during the taxable year in a health
access zone.
(C) At least 90 percent of his or her services for the qualified
health access zone employer during the taxable year are providing the
following kinds of professional services:
(i) Primary care, including obstetrics, gynecological services,
pediatric services, or geriatric services.
(ii) Behavioral health services, including mental health and
alcohol and substance abuse services.
(iii) Dental services.
(D) Is hired by the qualified health access zone employer after
the date of original designation of the area in which services were
performed as a health access zone.
(E) Meets one of the following:
(i) Was paid qualified wages by the qualified health access zone
employer for services of not less than an average of 35 hours per
week.
(ii) Was a salaried employee and was paid compensation during the
taxable year for full-time employment, within the meaning of Section
515 of the Labor Code, by the qualified health access zone employer.
(4) "Qualified health access zone employer" means an individual
who is a health access zone practitioner as defined in subdivision
(h) (f) of Section 7091 of the
Government Code who has received the certification of eligibility
described in Section 7097 of the Government Code or, in the case of a
pass-thru entity, the partners or shareholders of the pass-thru
entity are all health access zone practitioners as defined in
subdivision (h) (f) of Section 7091 of
the Government Code, who each have received the certification of
eligibility described in Section 7097 of the Government Code. For
purposes of this subdivision, the term "pass-thru entity" means a
partnership or "S" corporation.
(5) "Qualified wages" means wages subject to Division 6
(commencing with Section 13000) of the Unemployment Insurance Code
that are equal to or greater than 150 percent of the state minimum
wage.
(c) The net increase in qualified full-time employees of a
qualified health access zone employer shall be determined as provided
by this subdivision:
(1) (A) The net increase in qualified full-time employees shall be
determined on an annual full-time equivalent basis by subtracting
from the amount determined in subparagraph (C) the amount determined
in subparagraph (B).
(B) The total number of qualified full-time employees employed in
the preceding taxable year by the qualified health access zone
employer.
(C) The total number of full-time employees employed in the
current taxable year by the qualified health access zone employer.
(2) For qualified health access zone employers who first commence
doing business in the health access zone during the taxable year, the
number of full-time employees for the immediately preceding prior
taxable year shall be zero.
(d) The qualified health access zone employer shall provide the
certification of eligibility described in Section 7097 of the
Government Code upon request to the Franchise Tax Board.
(e) In the case where the credit allowed by this section exceeds
the "net tax," the excess may be carried over to reduce the "net tax"
in the following year, and succeeding nine years if necessary, until
the credit is exhausted.
(f) (1) The Franchise Tax Board may prescribe rules, guidelines,
or procedures necessary or appropriate to carry out the purposes of
this section.
(2) Chapter 3.5 (commencing with Section 11340) of Part 1 of
Division 3 of Title 2 of the Government Code does not apply to any
standard, criterion, procedure, determination, rule, notice, or
guideline established or issued by the Franchise Tax Board pursuant
to this section.
(g) This section shall remain in effect only until December 1,
2021, and as of that date is repealed.
SEC. 4. Section 14105.197 is added to the
Welfare and Institutions Code , to read:
14105.197. (a) Notwithstanding any other law, and for dates of
service on or before December 31, 2020, payments for primary care
services provided by a physician in an area designated as a health
access zone under Chapter 12.9 (commencing with Section 7091) of
Division 7 of Title 1 of the Government Code shall be made in
accordance with Section 14105.196, as that section read on January 1,
2014.
(b) This section shall be implemented only to the extent permitted
by federal law.
(c) The department shall seek any necessary federal approvals to
implement this section.
(d) This section shall remain in effect only until January 1,
2021, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2021, deletes or extends
that date.