S*0474(Rat #0170, Act #0105 of 1991)  General Bill, By J.C. Hayes
 A Bill to amend Section 12-23-810, Code of Laws of South Carolina, 1976,
 relating to taxation of hospitals licensed by the South Carolina Department of
 Health and Environmental Control to fund Medicaid expansion, so as to revise
 the basis for the tax for South Carolina hospitals calculating it based on the
 number of Medicaid patient days, to require that hospitals licensed in another
 state and doing business in South Carolina are subject to this tax as of July
 1, 1992, to provide the basis for doing business in South Carolina and for
 calculating the tax, and to increase the total revenue to be generated by this
 tax from seven and one-half to twenty-one and one-half million dollars; to
 amend Section 12-23-830, as amended, relating to payment of hospital taxes, so
 as to remove the grace period and penalties for late payment; to amend Section
 44-6-170, as amended, relating to hospital data reporting under the South
 Carolina Medically Indigent Assistance Act, so as to clarify information to be
 reported and to require hospitals licensed in another state and doing business
 in South Carolina as of July 1, 1991, to comply with these reporting
 requirements; to amend Section 44-6-155, as amended, relating to the Medicaid
 Expansion Fund, so as to provide that these funds are supplementary and exempt
 from budget reductions, to set the fund for at least forty-four million
 dollars for adjusting Medicaid reimbursement for all hospitals, and to allow
 the funds to carry forward.-amended title

   01/15/91  Senate Introduced and read first time SJ-10
   01/15/91  Senate Referred to Committee on Finance SJ-10
   03/06/91  Senate Committee report: Favorable Finance SJ-10
   03/07/91  Senate Read second time SJ-21
   03/12/91  Senate Read third time and sent to House SJ-21
   03/13/91  House  Introduced and read first time HJ-5
   03/13/91  House  Referred to Committee on Medical, Military,
                     Public and Municipal Affairs HJ-5
   04/17/91  House  Committee report: Favorable Medical, Military,
                     Public and Municipal Affairs HJ-22
   04/25/91  House  Retaining place on calendar committed to
                     Committee on Ways and Means HJ-87
   05/02/91  House  Committee report: Favorable with amendment Ways
                     and Means HJ-7
   05/07/91  House  Amended HJ-8
   05/07/91  House  Read second time HJ-10
   05/08/91  House  Read third time and returned to Senate with
                     amendments HJ-20
   05/08/91  Senate Concurred in House amendment and enrolled SJ-10
   05/27/91         Ratified R 170
   05/31/91         Signed By Governor
   05/31/91         Effective date 05/31/91
   05/31/91         Act No. 105
   06/26/91         Copies available

AN ACT TO AMEND SECTION 12-23-810, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO TAXATION OF HOSPITALS LICENSED BY THE SOUTH CAROLINA DEPARTMENT OF HEALTH AND ENVIRONMENTAL CONTROL TO FUND MEDICAID EXPANSION, SO AS TO REVISE THE BASIS FOR THE TAX FOR SOUTH CAROLINA HOSPITALS CALCULATING IT BASED ON THE NUMBER OF MEDICAID PATIENT DAYS, TO REQUIRE THAT HOSPITALS LICENSED IN ANOTHER STATE AND DOING BUSINESS IN SOUTH CAROLINA ARE SUBJECT TO THIS TAX AS OF JULY 1, 1992, TO PROVIDE THE BASIS FOR DOING BUSINESS IN SOUTH CAROLINA AND FOR CALCULATING THE TAX, AND TO INCREASE THE TOTAL REVENUE TO BE GENERATED BY THIS TAX FROM SEVEN AND ONE-HALF TO TWENTY-ONE AND ONE-HALF MILLION DOLLARS; TO AMEND SECTION 12-23-830, AS AMENDED, RELATING TO PAYMENT OF HOSPITAL TAXES, SO AS TO REMOVE THE GRACE PERIOD AND PENALTIES FOR LATE PAYMENT; TO AMEND SECTION 44-6-170, AS AMENDED, RELATING TO HOSPITAL DATA REPORTING UNDER THE SOUTH CAROLINA MEDICALLY INDIGENT ASSISTANCE ACT, SO AS TO CLARIFY INFORMATION TO BE REPORTED AND TO REQUIRE HOSPITALS LICENSED IN ANOTHER STATE AND DOING BUSINESS IN SOUTH CAROLINA AS OF JULY 1, 1991, TO COMPLY WITH THESE REPORTING REQUIREMENTS; TO AMEND SECTION 44-6-155, AS AMENDED, RELATING TO THE MEDICAID EXPANSION FUND, SO AS TO PROVIDE THAT THESE FUNDS ARE SUPPLEMENTARY AND EXEMPT FROM BUDGET REDUCTIONS, TO SET THE FUND FOR AT LEAST FORTY-FOUR MILLION DOLLARS FOR ADJUSTING MEDICAID REIMBURSEMENT FOR ALL HOSPITALS, AND TO ALLOW THE FUNDS TO CARRY FORWARD.

Be it enacted by the General Assembly of the State of South Carolina:

Revises basis for calculating South Carolina hospital license tax basis and includes out-of-state hospitals

SECTION 1. Section 12-23-810 of the 1976 Code, as added by Section 35 I, Part II, Act 189 of 1989, is amended to read:

"Section 12-23-810. (A) Every hospital licensed as a general hospital by the Department of Health and Environmental Control is subject to the payment of an excise, license, or privilege tax. Each hospital's tax must be based on its number of Medicaid patient days from the prior year as a percentage of total statewide Medicaid days.

(B) Effective July 1, 1992, every hospital licensed as a general hospital in another state is subject to the payment of an excise, license, or privilege tax if the hospital does business in South Carolina. A hospital is considered to be doing business in this State if the hospital, or the firm, corporation, association, or partnership which owns or operates the hospital, either directly or through a subsidiary corporation, establishes a physical presence in the State by owning, leasing, subleasing, or by any other means arranges to provide space to engage in or transact activity for financial profit or gain. Each hospital's tax must be based on the total number of patient days from the prior year attributed to South Carolina residents, excluding Medicaid patient days, adjusted by the hospital's ratio of total net to gross patient revenue. Net patient revenue for purposes of this formula is defined as gross patient revenue less contractual allowances, bad debts, uncompensated indigent care, property taxes, and state and federal income taxes.

(C) Total annual revenues from the tax, exclusive of penalties and interest, in subsection (A) of this section must equal twenty-one and one-half million dollars."

Removal of grace period and penalty for late payment from hospital taxes

SECTION 2. Section 12-23-830 of the 1976 Code, as last amended by Act 189 of 1989, is further amended to read:

"Section 12-23-830. On the first day of each quarter each general hospital shall remit one-fourth of its annual tax to the Tax Commission."

Revises hospital data reporting requirements

SECTION 3. Section 44-6-170 of the 1976 Code, as last amended by Section 35 F, Part II, Act 189 of 1989, is amended by adding:

"(D) In addition to hospitals licensed by the Department of Health and Environmental Control, effective July 1, 1991, the provisions of this section apply to a hospital licensed in another state if the hospital does business in South Carolina. Information required by subsection (A)(1) through (9) of this section must be submitted for all patients. Information required by subsection (A)(7) of this section also must identify total patient days attributed to South Carolina residents. Information required by subsection (A)(10) of this section must be submitted only for residents of South Carolina. A hospital is considered to be doing business in this State if the hospital, or the firm, corporation, association, or partnership which owns or operates the hospital, either directly or through a subsidiary corporation, establishes a physical presence in this State by owning, leasing, subleasing, or by any other means arranges to provide space to engage in or transact activity for financial profit or gain."

Budgetary protections for Medicaid expansion fund

SECTION 4. Section 44-6-155(A) of the 1976 Code, as added by Section 35 D, Part II, Act 189 of 1989, is amended to read:

"(A) There is created the Medicaid Expansion Fund into which must be deposited:

(1) funds collected pursuant to Section 44-6-146;

(2) funds collected pursuant to Section 12-23-810; and

(3) funds appropriated pursuant to subsection (B) of this section.

This fund must be separate and distinct from the general fund. These funds are supplementary and may not be used to replace general funds appropriated by the General Assembly or other funds used to support Medicaid. These funds and the programs specified in subsection (C) are exempt from any budgetary cuts, reductions, or eliminations caused by the lack of general fund revenues. Earnings on investments from this fund must remain part of the separate fund and must not be deposited in the general fund."

Revision to hospital Medicaid reimbursement purposes

SECTION 5. Section 44-6-155(C)(6) of the 1976 Code, as added by Section 35 D, Part II, Act 189 of 1989, is amended to read:

"(6) to provide a pool of at least forty-four million dollars for the sole purpose of adjusting Medicaid reimbursement for hospitals as provided in Section 44-6-140(A)(1). Funds in the pool not immediately used for this purpose must be carried forward for eventual use for this purpose;".

Time effective

SECTION 6. This act takes effect upon approval by the Governor.

Approved the 31st day of May, 1991.