To Create An Income Tax Credit For Contributions To Certain Rural Hospital Organizations; And To Create The Helping Enhance Access To Rural Treatment (heart) Act.
HB1674 creates the Helping Enhance Access to Rural Treatment (HEART) Act and establishes a new Arkansas income tax credit for donations made to approved rural hospital organizations. The bill defines which hospitals may qualify, generally limiting eligibility to licensed acute care hospitals in rural counties or critical access hospitals that participate in Medicare and Medicaid, serve indigent patients, meet a minimum charity-care threshold, file required financial forms, and remain current on audits and reports. The Department of Health would be responsible for approving eligible hospitals, ranking them by financial need, publishing the list and related guidance, and reporting annually to legislative committees and the public.
The bill also sets up a detailed donation and preapproval process through the Department of Finance and Administration. Individual taxpayers could receive a credit equal to the amount contributed, subject to annual and per-donor limits, while corporate and other entity donors could receive a credit up to the lesser of the contribution or 75% of their tax liability. The total statewide credit cap would be $75 million per year, with additional caps on contributions to any single hospital. Unused credits could be carried forward for five years, and the bill includes rules for preapproval, confirmation letters, reporting, and treatment of unspecified donations, along with an annual audit by the Department of Inspector General.
HB1674 would add a new subchapter to Title 20 governing rural hospital eligibility and a new section to Title 26 creating the income tax credit. It would require the Department of Health and the Department of Finance and Administration to administer a new donor-credit program, maintain public lists and reports, rank hospitals by financial need, and oversee compliance and audits. The bill would directly affect taxpayers, rural hospitals, third-party fundraising or management entities, and state agencies responsible for tax administration and health oversight.
No committee transcripts or recorded votes were provided, so there is no direct evidence of debate or opposition in the available record. Based on the bill text, the measure appears designed to support rural hospitals and likely reflects a generally favorable policy goal of improving access to care in underserved areas. The structure of the bill, however, suggests a strong emphasis on oversight, transparency, and limits on administrative fees, indicating an effort to address concerns about accountability and proper use of the tax credit.
The main potential points of contention are the size and structure of the tax credit, the $75 million annual statewide cap, and the administrative complexity of the preapproval and ranking system. Another likely issue is the requirement that hospitals be ranked by financial need and that third parties disclose the full list of eligible hospitals to donors, which could affect fundraising arrangements. The bill also limits third-party fees to 3% and requires detailed reporting and audits, which may be viewed as necessary safeguards by supporters but burdensome by hospitals or fundraising intermediaries.