In response to your many inquiries regarding SB 258 the rural hospital tax credit bill, please see the following below.

Quote from Senator Jack Hill!
“NOTE: This process will not be complicated. There is no reason for any hospital, individual or business to contract with or hire a third party vendor to receive the benefits of this tax credit. Please call me, the Department of Revenue or the Department of Community Health with any issues or questions at the appropriate time.”

The Facts are:
1) Rural Hospitals are suffering from loss of cash over the last 17 years having received no major rate increases nor inflation adjustments.
2) HTH has recommended not to engage outside consultants for SB258 until DCH writes regulations and then review any necessity to do so.
  1. a. See previous attached emails on SB258 recommending not to engage outside consultants until DCH writes regulations
3) This bill includes $180 million in tax credit benefits over three years, i.e., $50 million , $60 million , then $70 million.
  1. a. That much money draws major unintended consequences from entities wanting to tap into the money your hospital needs and was intended for rural hospitals
4) Representative Geoff Duncan’s full intent for the bill was for there to be no wasted money on consultants to “help hospitals find the money from donors”
5) This bill, SB 258, received much opposition through the legislative process up through the “sine die” last night. The question then becomes “is any of that opposition to SB 258 supporting and or benefiting from any outside consultants tapping into your hospital tax credit money?” If so, then “why?”, since your hospitals are in such desperate need for cash.
6) Commissioner Reese has stated over an again that every effort would be made by DCH to make this a simple set of regulations so as to avoid a cottage industry being set up to bleed money off the bill that does not help the rural hospitals.
7) DCH has not published the final regulations for SB 258 pending review in the Governor’s Office, thus money seeking outside consultants may be attempting to engage hospitals when they have no evidence of what the real meaning of the regulations are, thus contracts with consultants prior to publication of the rules can lead to wasted money – money that was not intended to be wasted, cannot afford to be wasted, nor was intended to go to overhead bearing consultants.
8) HomeTown has opted not to partner with any consultants who may seek to “help your hospital in this matter”. Rather HomeTown is offering to your hospital the vetting of inquiries that you may receive to “help your hospital” to make sure you understand all of the ramifications of any contract offering.
9) What you do and the decisions that you make for your hospital on this matter can lock you into a three year commitment since this is a three year bill and if done on a percentage basis or sliding scale can grow substantially as an expense over the next three years.
10) Senator Jack Hill has just published his thoughts and ideas and makes it very clear that “This process will not be complicated. There is no reason for any hospital, individual or business to contract with or hire a third party vendor to receive the benefits of this tax credit.” See Senator Hill’s comments below as posted in his newsletter.

11) Thus, Serious questions need to be asked and answered:
  1. a. Why would my hospital contract with any entity that we do not know and has not been to my hospital.
  2. b. What fees are to be split with any sponsoring organization?
  3. c. What are the management fees? Assume a 7% management fee, as is reported to be charged by some entities, over $4 million dollars solicited per hospital, then the consultant gets $280,390 of your hospital and donors money. Explaining that to your county commission may be problematic. Overall, the management fee can grow from $3.5 million on the first $50 million up to $4.9 million on the last $70 million of the tax credit funds intended to help rural hospitals not consultants assuming the 7% fee as charged in some cases. Even if only half this amount, it is still a lot of money going elsewhere rather than to a rural hospital.
  4. d. To whom is the money paid?
  5. e. What are the terms of payment to a consultant?
  6. f. Can the money be used to pay down bad debt or retire bond debt that may be in covenant violations?
  7. g. Do the consultants have governing boards and if so who are they and what accountability do they have to the state or to your hospital board?
  8. h. Has anybody seen any rural hospital eligibility list. If not why is my hospital being solicited until that list is published?
  9. i. How did any consultants get my hospital’s name and number as eligible since DCH has not published it yet?
  10. j. Is there any steerage of donors involved by larger hospitals or consultants that may in turn impact rural hospital survival?
  11. k. Why would Senator Jack Hill, Chairman of Senate Appropriations, publish such a thorough discussion of the bill and make such a recommendation as in the last paragraph?
  12. l. Does this contract mean that my hospital loses personal contact with the corporate donors. Will corporate donors be solicited that may have other motives than helping my hospital?
  13. m. How can your hospital spend consulting fees on outside consultants to bring money in when assurances have been given by the state to make the process so simple as to not require outside consultants when your hospital may be receiving county subsidies to operate.
i. The next question then is “ is my county subsidy going to pay consulting fees instead of hospital operations?” when it rather should be going to hospital operations as planned for and intended by the bill.
  1. n. Does my board really understand this bill and the ramifications of funds lost to consulting fees.
  2. o. As can be seen this bill can bring some serious issues to be dealt with by the hospital and its board if serious consideration is not given to all aspects of the matter.
12) Action Item:
  1. a. Come to the HomeTown Health Annual Fall Meeting at Callaway Gardens on October 24-26, 2016 where Commissioner Clyde Reese has been asked to come explain the DCH regulations.

Notes from the Senate
August19, 2016

This week, the Department of Revenue (DOR) published proposed regulations and procedures (Rule 560-7-8-.57) for implementing SB 258 from the 2016 Legislative Session, titled "Qualified Rural Hospital Organization Expense Tax Credit." DOR will consider public comments until September 16, 2016 when the rules will be adopted.

The Department of Community Health (DCH) will soon publish a list of qualified hospitals and the tax credit program will begin January 1, 2017.

SB 258 allowed a Georgia income tax credit for taxpayers who make contributions to a qualified rural hospital. First, the taxpayer applies to DOR with the amount of contribution planned. DOR approves or disapproves within 30 days. If approved, the actual donation must be made within 60 days.

A quick review of the key provisions of the tax credit:
  • Limit of $4 million in contributions per hospital.
  • Cap of $50 million in tax credits for 2017.
  • January 1 to June 30, $2 million limit on tax credits for individual taxpayers per hospital and $2 million for corporate and fiduciary taxpayers per hospital.
  • July 1 to December 31, DOR will approve all until $4 million per hospital is reached.
  • For single, individual or head of household, taxpayer donors receive tax credit of 80% of the donation or $2,500 per year, whichever is less.
  • Married, filing jointly, is limited to 80% of the amount donated or $5,000, whichever is less.
  • For corporations, the credit is limited to 70% of the donation or 75% of the Georgia income tax liability of the corporation, whichever is less.
  • The tax credits cannot accumulate to more than the donor's Georgia tax liability.
  • The process is first-come, first received with no proration.

The Process:
  • Donor must file electronically with the DOR for preapproval of the tax credit, identifying the hospital and amount of the proposed donation.
  • Donor receives approval or disapproval from DOR within 30 days.
  • Donor must then actually make the contribution within 60 days.
  • Donor must submit an electronic report detailing the amount of the contribution, the number on the certificate after the donation and a copy of the letter from the rural hospital noting the receipt of the donation within 30 days.
  • DOR will review and, if approved, add to the hospital's list of donations...if disapproved, subtract from total.

Hospital Responsibilities:
  • The rural hospital must submit a 5 year plan detailing the financial viability and stability of the hospital.
  • DCH will review hospital plans and consider in future eligibility determinations.
  • Must report monthly on the receipt and expenditure of all donations, including names, addresses and ID numbers of donors.

NOTE: This process will not be complicated. There is no reason for any hospital, individual or business to contract with or hire a third party vendor to receive the benefits of this tax credit. Please call me, the Department of Revenue or the Department of Community Health with any issues or questions at the appropriate time.

The DOR proposed rule may be accessed at Full transcripts of bills may be found at Simply type the bill number into the box at the top left-hand corner of the screen and specify if it is in the House or the Senate.

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