CERTIFICATION OF ENROLLMENT
SUBSTITUTE HOUSE BILL 1624
57th
Legislature
2001 Second
Special Legislative Session
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Passed by the House June 4,
2001
Yeas 87 Nays 0
Speaker of the House of Representatives
Speaker of the House of
Representatives
Passed by the Senate June 14,
2001
Yeas 48 Nays 0
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CERTIFICATE
We, Timothy A. Martin and
Cynthia Zehnder, Co-Chief Clerks of the House of Representatives of the State
of Washington, do hereby certify that the attached is SUBSTITUTE HOUSE
BILL 1624 as passed by the House of Representatives and the Senate on
the dates hereon set forth.
Chief
Clerk
Chief
Clerk
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President of the Senate
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Approved Place Style On Codes above, and Style Off Codes
below.
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FILED
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Governor of the State of
Washington
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Secretary of
State
State of
Washington
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H-2165.1 _______________________________________________
SUBSTITUTE HOUSE BILL 1624
_______________________________________________
Passed Legislature - 2001 2nd
Special Session
State of Washington 57th Legislature 2001
Regular Session
By
Read first time . Referred to Committee on .
Clarifying the taxation
of amounts received by public entities for health or welfare services.
AN ACT Relating to the
business and occupation tax deduction for health or social welfare services as
applied to government-funded health benefits paid through managed care
organizations; amending RCW 82.04.4297; creating new sections; and declaring an
emergency.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF
WASHINGTON:
NEW SECTION. Sec.
1. The legislature finds
that the deduction under the business and occupation tax statutes for
compensation from public entities for health or social welfare services was
intended to provide government with greater purchasing power when government
provides financial support for the provision of health or social welfare
services to benefited classes of persons. The legislature also finds that both
the legislature and the United States congress have in recent years modified
government-funded health care programs to encourage participation by
beneficiaries in highly regulated managed care programs operated by persons who
act as intermediaries between government entities and health or social welfare
organizations. The legislature further finds that the objective of these
changes is again to extend the purchasing power of scarce government health
care resources, but that this objective would be thwarted to a significant
degree if the business and occupation tax deduction were lost by health or
social welfare organizations solely on account of their participation in
managed care for government-funded health programs. In keeping with the
original purpose of the health or social welfare deduction, it is desirable to
ensure that compensation received from government sources through contractual
managed care programs also be deductible.
Sec. 2. RCW 82.04.4297 and 1988
c 67 s 1 are each amended to read as follows:
In computing tax there
may be deducted from the measure of tax amounts received from the United States
or any instrumentality thereof or from the state of Washington or any municipal
corporation or political subdivision thereof as compensation for, or to support,
health or social welfare services rendered by a health or social welfare
organization or by a municipal corporation or political subdivision, except
deductions are not allowed under this section for amounts that are received
under an employee benefit plan. For purposes of this section, "amounts
received from" includes amounts received by a health or social welfare
organization that is a nonprofit hospital or public hospital from a managed
care organization or other entity that is under contract to manage health care
benefits for the federal medicare program authorized under Title XVIII of the
federal social security act; for a medical assistance, children's health, or
other program authorized under chapter 74.09 RCW; or for the state of
Washington basic health plan authorized under chapter 70.47 RCW, to the extent
that these amounts are received as compensation for health care services within
the scope of benefits covered by the pertinent government health care program.
NEW SECTION. Sec.
3. This act applies to taxes
collected after the effective date of this act, including taxes collected on
reporting periods prior to the effective date of this act.
NEW
SECTION. Sec. 4. This act is necessary for
the immediate preservation of the public peace, health, or safety, or support
of the state government and its existing public institutions, and takes effect
immediately.