S.F. 2238 Section 1. NEW SECTION . 135P.1 Title. 1 This Act shall be known and may be cited as the “Health 2 Enterprise Zones Act” . 3 Sec. 2. NEW SECTION . 135P.2 Purpose. 4 The purpose of health enterprise zones is to encourage 5 public and private partners on the state and local level 6 to collaborate in targeting resources to reduce health 7 disparities, address social determinants of health, improve 8 individual health outcomes and population health, and reduce 9 health care costs or produce savings in the health care system. 10 Sec. 3. NEW SECTION . 135P.3 Definitions. 11 As used in this chapter unless the context otherwise 12 requires: 13 1. “Advisory council” means the medical home system advisory 14 council created in section 135.159. 15 2. “Department” means the department of public health. 16 3. “Director” means the director of public health. 17 4. “Fund” means the health enterprise zone trust fund 18 established in section 135P.6. 19 5. “Health enterprise zone” means a contiguous geographic 20 area that meets all of the requirements specified in section 21 135P.4. 22 6. “Health enterprise zone practitioner” means a health care 23 practitioner who is licensed or certified in this state and who 24 provides any of the following: 25 a. Primary care, including obstetrics, gynecological 26 services, pediatric services, or geriatric services. 27 b. Behavioral health services, including mental health or 28 substance use disorder services. 29 c. Dental services. 30 Sec. 4. NEW SECTION . 135P.4 Health enterprise zones —— 31 requirements —— application —— designation —— reporting. 32 1. In order to be designated as a health enterprise zone, 33 a contiguous geographic area shall meet all of the following 34 requirements: 35 -1- LSB 5529XS (24) 85 pf/sc 1/ 14

S.F. 2238 a. Demonstrate measurable and documented health disparities 1 and poor health outcomes or a shortage of health enterprise 2 zone practitioners. 3 b. Be small enough geographically to allow for the 4 incentives offered under this chapter to have a significant 5 impact on improving individual health outcomes and population 6 health, reducing health disparities and addressing determinants 7 of health, including those related to racial, ethnic, 8 geographic, and economic disparities, or increasing the 9 availability of health enterprise zone practitioners. 10 c. Be designated as a health enterprise zone by the advisory 11 council and the director in accordance with this chapter. 12 2. A nonprofit community-based organization or a local 13 government agency may apply to the department on behalf of an 14 area seeking health enterprise zone designation. 15 3. The application shall be in the form and the manner and 16 contain the information the department requires by rule. 17 4. The completed application shall contain a plan to 18 effectively and sustainably reduce health disparities and 19 address social determinants of health, improve individual 20 health outcomes and population health, and reduce costs or 21 produce savings in the health care system, and shall include 22 all of the following: 23 a. A description of the plan of the nonprofit 24 community-based organization or local government agency to 25 utilize funding available under this chapter to address health 26 care practitioner capacity, improve health services delivery, 27 effectuate community improvements, and conduct outreach and 28 education efforts. 29 b. A proposal to use the funding available under this 30 chapter to provide for loan repayment incentives to encourage 31 health enterprise zone practitioners to practice in the area. 32 c. A plan to use other benefits provided under this chapter 33 to do the following: 34 (1) Encourage health enterprise zone practitioners to 35 -2- LSB 5529XS (24) 85 pf/sc 2/ 14

S.F. 2238 establish or expand health care practices in the area. 1 (2) Implement innovative public health strategies that 2 provide for accessible, integrated, culturally competent health 3 care in the area supported by care coordination, prevention 4 services, and community outreach and education. The strategy 5 shall utilize local public health, community health workers, 6 health coaches, registered dieticians, optometrists, dentists 7 and dental hygienists, school-based health care professionals, 8 community paramedics, care coordinators, social workers, peer 9 learning professionals, community-based disease management 10 activities coordinators, and others to address health 11 disparities and social determinants of health. 12 (3) Address health disparities that focus on ways to 13 expand access to health care and other resources and services 14 that address social determinants of health including those 15 related to nutrition, employment, housing, transportation, 16 public safety, and other underlying factors that contribute to 17 increased costs in health care. 18 (4) Expand the use of electronic health records and data 19 collection and analytics to address health disparities and 20 social determinants of health, rather than relying solely on 21 diagnoses, to better understand and direct resources toward the 22 root causes of poor health outcomes. 23 (5) Develop a population health and prevention strategy to 24 coordinate and mobilize health care and community resources 25 to positively impact the health and wellness of the residents 26 of the health enterprise zone by identifying needs, filling 27 existing gaps in services without duplication, and establishing 28 channels of communication between providers of health care and 29 community resources. 30 (6) Utilize mobile delivery methods or existing health care 31 delivery and community resources locations, or develop health 32 care transportation routes to provide greater accessibility to 33 health care and other community resources. 34 5. The advisory council shall make recommendations to the 35 -3- LSB 5529XS (24) 85 pf/sc 3/ 14

S.F. 2238 director on the designation of health enterprise zones, and the 1 director shall designate areas as health enterprise zones based 2 upon the recommendations of the advisory council. The director 3 may limit the number of health enterprise zone designations in 4 accordance with the funding available. The decision of the 5 director to designate an area as a health enterprise zone is 6 final. 7 6. In recommending and designating health enterprise zones, 8 the advisory council and the director shall consider all of the 9 following: 10 a. The geographic diversity of the areas for which 11 applications are submitted. 12 b. Support from and participation of key stakeholders from 13 the public and private sectors, including residents of the 14 area, local government, local government agencies including 15 public health and social services agencies, behavioral health 16 providers, dentists, pharmacies, hospitals, primary care 17 providers, schools, and others. 18 c. The plan for long-term funding and sustainability of the 19 health enterprise zone. 20 d. Inclusion of supplementary funds from the private sector. 21 e. The level of collaboration of local boards of health 22 and hospitals in the area in conducting a joint community 23 health needs assessment and developing an integrated health 24 improvement plan, and the extent to which the goals of the 25 integrated health improvement plan support the approach 26 specified in the application. 27 f. A plan for evaluation of the impact of designation of 28 the proposed area as a health enterprise zone. In addition 29 to diagnosis-based outcomes such as reduction in preventable 30 hospital emergency department visits and hospital admissions 31 and readmissions, outcomes shall measure increased access 32 to primary and preventive care, increased availability of 33 medical homes and the level of integration of primary care and 34 behavioral health services in the area, and the increased use 35 -4- LSB 5529XS (24) 85 pf/sc 4/ 14

S.F. 2238 of electronic medical records. 1 g. Other factors specified in rule that are appropriate 2 to demonstrate a commitment to reduce health disparities and 3 improve health outcomes. 4 7. On or before December 15, annually, the director shall 5 submit to the governor and the general assembly a report that 6 includes all of the following: 7 a. The number of health enterprise zone applications 8 approved for the preceding fiscal year. 9 b. The number and type of incentives granted in each health 10 enterprise zone. 11 c. Evidence of the impact of incentives in attracting health 12 enterprise zone practitioners to health enterprise zones. 13 d. Evidence of the impact of the incentives offered in 14 health enterprise zones in reducing health disparities and 15 addressing social determinants of health, improving individual 16 health outcomes and population health, and reducing costs or 17 producing savings in the health care system. 18 Sec. 5. NEW SECTION . 135P.5 Incentives available to health 19 enterprise zones. 20 1. All of the following are available as incentives for 21 designated health enterprise zones: 22 a. Tax credits against the state income tax as provided in 23 sections 135P.7 and 135P.8. 24 b. Loan repayment assistance as provided for in the 25 application for designation as a health enterprise zone. 26 c. Grants to support certification as a patient-centered 27 medical home as provided in chapter 135, division XXII. 28 d. Grants to support the infrastructure and positions 29 to provide mental health services, telemedicine, care 30 coordination, electronic health records, and data collection 31 and analysis. 32 e. Other grants as specified in this section. 33 2. A nonprofit community-based organization or a local 34 government agency that applies on behalf of an area for 35 -5- LSB 5529XS (24) 85 pf/sc 5/ 14

S.F. 2238 designation as a health enterprise zone may receive grants, as 1 determined by the director, to implement actions outlined in 2 the organization’s or agency’s application to reduce health 3 disparities and address social determinants of health, improve 4 individual health outcomes and population health, and reduce 5 costs or produce savings in the health care system. 6 3. A health enterprise zone practitioner may apply to 7 the director for a grant to defray the costs of capital or 8 leasehold improvements to, or medical or dental equipment to be 9 used in, a health enterprise zone. 10 a. A grant to defray the cost of medical or dental equipment 11 shall not exceed the lesser of twenty-five thousand dollars or 12 fifty percent of the cost of the equipment. 13 b. A grant for capital or leasehold improvements shall 14 be for the purpose of improving or expanding the delivery of 15 health care services in the health enterprise zone. 16 c. To qualify for a grant, the health enterprise zone 17 practitioner shall own or lease the health care facility and 18 provide health care services from the facility. 19 Sec. 6. NEW SECTION . 135P.6 Health enterprise zone trust 20 fund. 21 1. A health enterprise zone trust fund is created in the 22 state treasury under the authority of the department. Moneys 23 received through appropriations and other moneys specified for 24 deposit in the trust fund shall be deposited in the trust fund. 25 2. Moneys in the trust fund shall be used, subject to their 26 appropriation by the general assembly, by the department to 27 provide the incentives specified in this chapter to support 28 health enterprise zones. 29 3. The trust fund shall be separate from the general fund 30 of the state and shall not be considered part of the general 31 fund. The moneys in the trust fund shall not be considered 32 revenue of the state, but rather shall be funds of the trust 33 fund. The moneys deposited in the trust fund are not subject 34 to section 8.33 and shall not be transferred, used, obligated, 35 -6- LSB 5529XS (24) 85 pf/sc 6/ 14

S.F. 2238 appropriated, or otherwise encumbered, except to provide for 1 the purposes of this chapter. Notwithstanding section 12C.7, 2 subsection 2, interest or earnings on moneys deposited in the 3 trust fund shall be credited to the trust fund. 4 4. The department shall adopt rules pursuant to chapter 17A 5 to administer the trust fund. 6 Sec. 7. NEW SECTION . 135P.7 Health enterprise zone 7 practitioner tax credit. 8 1. A health enterprise zone practitioner who practices in 9 a health enterprise zone may be eligible for a credit against 10 the taxes imposed in chapter 422, division II, if the taxpayer 11 complies with all of the following: 12 a. Accepts and provides care for patients in the health 13 enterprise zone, including those enrolled in the medical 14 assistance program or those who are uninsured. 15 b. Timely files the tax return on which the credit is 16 claimed, including any extension of time to file. 17 c. Is not currently delinquent in filing any tax return with 18 this state nor has delinquent accounts, charges, fees, loans, 19 taxes, or other indebtedness owed to this state or a political 20 subdivision of this state. 21 d. Meets any other criteria established by the department 22 for the health enterprise zone program. 23 2. A nonprofit community-based organization or a local 24 government agency that submits an application for designation 25 as a health enterprise zone and is approved by the director, 26 may also submit to the department a request for certification 27 of eligibility for an income tax credit on behalf of a health 28 enterprise zone practitioner practicing or seeking to practice 29 in the health enterprise zone. 30 3. a. If the department approves a request for 31 certification of eligibility submitted under this section, 32 a health enterprise zone practitioner may claim a credit in 33 an amount equal to the taxpayer’s income tax payable to this 34 state, computed without regard to the credit allowed under 35 -7- LSB 5529XS (24) 85 pf/sc 7/ 14

S.F. 2238 this section, section 135P.8, or the credit for withheld tax 1 and estimated tax paid under section 422.16, from income 2 attributable to the provision of health care services in the 3 health enterprise zone. 4 b. The maximum amount that may be refunded to a taxpayer 5 in any tax year the credit allowed under this section is 6 claimed shall not exceed the sum of the amount withheld from 7 the taxpayer’s wages or other income pursuant to section 422.16 8 for the tax year, plus the amount paid as estimated tax by the 9 taxpayer pursuant to section 422.16 for the tax year, from 10 income attributable to the provision of health care services 11 in the health enterprise zone. 12 4. To be certified as eligible for the credit provided 13 under this section, a health enterprise zone practitioner may 14 apply for certification through the nonprofit community-based 15 organization or the local government agency that submits an 16 approved application under section 135P.4. The taxpayer shall 17 include with the tax return the tax credit certificate and a 18 statement from the applicant organization or agency verifying 19 the amount received by the practitioner for providing health 20 care services in the health enterprise zone, in a form and 21 manner prescribed by the department of revenue. 22 5. Eligibility for the certification for the credit 23 provided under this section is limited by the availability 24 of funds appropriated for that purpose, as determined by the 25 department. 26 6. Certificates of eligibility shall be subject to approval 27 by the department on a first-come, first-served basis, as 28 determined by rule of the department. 29 7. The department, in consultation with the director of 30 revenue, shall adopt rules to implement the tax credit under 31 this section. 32 Sec. 8. NEW SECTION . 135P.8 Health enterprise zone 33 qualified position tax credit. 34 1. a. A health enterprise zone practitioner may be eligible 35 -8- LSB 5529XS (24) 85 pf/sc 8/ 14

S.F. 2238 for a credit against taxes imposed in chapter 422, division II, 1 for hiring an individual for a qualified position in the health 2 enterprise zone, as certified by the department for the taxable 3 year. 4 b. To be eligible for the credit under this section, the 5 taxpayer shall meet the following requirements: 6 (1) The taxpayer accepts and provides care for patients in a 7 health enterprise zone, including those enrolled in the medical 8 assistance program or those who are uninsured. 9 (2) The taxpayer creates and fills one or more qualified 10 positions during a period of twenty-four consecutive months. 11 (3) The taxpayer’s tax return on which the credit is claimed 12 is timely filed, including any extension of time to file. 13 (4) The taxpayer is not currently delinquent in filing 14 any tax return with this state nor does the taxpayer have 15 delinquent accounts, charges, fees, loans, taxes, or other 16 indebtedness owed to this state or a political subdivision of 17 this state. 18 2. The credit allowed under this section shall be claimed 19 over a twenty-four-month period, with one-half of the credit 20 amount allowed each year beginning with the taxable year in 21 which the qualified position was filled. 22 3. The maximum amount of the credit is ten thousand dollars. 23 The credit is refundable. 24 4. If a qualified position for which a credit is claimed is 25 filled for a period of less than twenty-four months, the tax 26 credit shall be recaptured as follows: 27 a. The tax credit shall be recomputed and reduced on a 28 prorated basis, based on the period of time the qualified 29 position was filled, as determined by the department and 30 reported to the department of revenue. 31 b. The health enterprise zone practitioner who received 32 the tax credit shall repay any amount of the credit that may 33 have already been refunded to the practitioner that exceeds 34 the amount recomputed by the department under this subsection. 35 -9- LSB 5529XS (24) 85 pf/sc 9/ 14

S.F. 2238 The repayment of a credit pursuant to this subsection shall 1 be considered a tax payment due and payable to the department 2 of revenue by the taxpayer who has claimed such credit, and 3 the failure to make such a repayment may be treated by the 4 department of revenue in the same manner as a failure to pay 5 the tax shown due or required to be shown due with the filing of 6 a return or deposit form. 7 5. To be certified as eligible for the tax credit provided 8 under this section, a health enterprise zone practitioner may 9 apply for certification through the nonprofit community-based 10 organization or the local government agency that submits an 11 approved application under section 135P.4. 12 6. Eligibility for certification for the credit provided 13 under this section, and the amount of the credit certified, 14 are limited by the availability of funds appropriated for that 15 purpose, as determined by the department. 16 7. Certificates of eligibility shall be subject to approval 17 by the department on a first-come, first-served basis, as 18 determined by rule of the department. 19 8. The department, in consultation with the director of 20 revenue, shall adopt rules to implement the tax credit under 21 this section. 22 9. As used in this section unless the context otherwise 23 requires: 24 a. “Qualified employee” means a health enterprise zone 25 practitioner who is not the taxpayer, or a community health 26 worker, health coach, registered dietician, optometrist, 27 dentist or dental hygienist, school nurse, community paramedic, 28 care coordinator, social worker, peer learning professional, 29 community-based disease management activities coordinator, 30 or other individual who provides direct support to a health 31 enterprise zone practitioner thereby increasing access to 32 services in the health enterprise zone. 33 b. (1) “Qualified position” means a position held 34 by a qualified employee that meets all of the following 35 -10- LSB 5529XS (24) 85 pf/sc 10/ 14

S.F. 2238 requirements: 1 (a) Pays at least one hundred fifty percent of the federal 2 minimum wage. 3 (b) Is full-time and of indefinite duration. 4 (c) Is newly created as the result of the establishment or 5 expansion of services in a health enterprise zone. 6 (2) “Qualified position” does not include a position that is 7 filled for a period of less than twelve months. 8 Sec. 9. NEW SECTION . 422.11C Health enterprise zone tax 9 credits. 10 1. The taxes imposed under this division , less the credits 11 allowed under section 422.12 , shall be reduced by a health 12 enterprise zone practitioner tax credit authorized pursuant to 13 section 135P.7 . 14 2. The taxes imposed under this division , less the credits 15 allowed under section 422.12 , shall be reduced by a health 16 enterprise zone qualified position tax credit authorized 17 pursuant to section 135P.8 . 18 Sec. 10. APPLICABILITY. The provisions of this Act 19 providing for health enterprise zone practitioner tax credits 20 and health enterprise zone qualified position tax credits apply 21 to tax years beginning on or after January 1, 2015. 22 EXPLANATION 23 The inclusion of this explanation does not constitute agreement with 24 the explanation’s substance by the members of the general assembly. 25 This bill creates the health enterprise zone Act. 26 The purpose of health enterprise zones is to encourage 27 public and private partners on the state and local level 28 to collaborate in targeting resources to reduce health 29 disparities, address social determinants of health, improve 30 individual health outcomes and population health, and reduce 31 health care costs throughout the state. 32 A “health enterprise zone” is defined as a contiguous 33 geographic area that demonstrates measurable and documented 34 health disparities and poor health outcomes or a shortage 35 -11- LSB 5529XS (24) 85 pf/sc 11/ 14

S.F. 2238 of health enterprise zone practitioners; is small enough 1 geographically to allow for the incentives offered under the 2 bill to have a significant impact on improving individual 3 health outcomes and population health, reducing health 4 disparities and addressing determinants of health including 5 those related to racial, ethnic, geographic, and economic 6 disparities, or increasing the availability of health 7 enterprise zone practitioners; and is designated as a health 8 enterprise zone by the medical home advisory council and the 9 director in accordance with this chapter. A “health enterprise 10 zone practitioner” means a health care practitioner who is 11 licensed or certified in this state and who provides: primary 12 care, including obstetrics, gynecological services, pediatric 13 services, or geriatric services; behavioral health services 14 including mental health or substance use disorder services; or 15 dental services. 16 The bill provides that a nonprofit community-based 17 organization or a local government agency may apply to the 18 department of public health (DPH) on behalf of an area seeking 19 health enterprise zone designation. The bill specifies 20 the required information to be included in the application, 21 including a plan to effectively and sustainably reduce health 22 disparities and address social determinants of health, improve 23 individual health outcomes and population health, and reduce 24 costs or produce savings in the health care system. The bill 25 also specifies the required elements of a plan submitted with 26 the application. 27 The bill directs the medical home advisory council to 28 make recommendations to the director of public health on the 29 designation of health enterprise zones. The director is to 30 designate areas as health enterprise zones based upon the 31 recommendations of the advisory council, and may limit the 32 number of designations of health enterprise zones in accordance 33 with the funding available. The decision of the director to 34 designate an area as a health enterprise zone is final. 35 -12- LSB 5529XS (24) 85 pf/sc 12/ 14

S.F. 2238 The bill provides considerations for the advisory council 1 and the director in recommending and designating health 2 enterprise zones. 3 The director is required on or before December 15, annually, 4 to submit to the governor and the general assembly a report 5 that includes the number of health enterprise zone applications 6 approved for the preceding fiscal year; the number and type of 7 incentives granted in each health enterprise zone; evidence of 8 the impact of incentives in attracting health enterprise zone 9 practitioners to health enterprise zones; and evidence of the 10 impact of the incentives offered in health enterprise zones in 11 reducing health disparities and addressing social determinants 12 of health, improving individual health outcomes and population 13 health, and reducing costs or producing savings in the health 14 care system. 15 Incentives for health enterprise zones under the bill 16 include tax credits and loan repayment; grants to support 17 certification as a patient-centered medical home; grants to 18 support the infrastructure and positions to provide mental 19 health services, telemedicine, care coordination, electronic 20 health records, and data collection and analysis; grants to 21 defray the costs of capital or leasehold improvements to, or 22 medical or dental equipment to be used in, a health enterprise 23 zone; and grants to implement other provisions included in an 24 approved health enterprise zone application. 25 The bill creates a health enterprise zone trust fund in the 26 state treasury under the authority of DPH. The trust fund is 27 comprised of moneys received through appropriations and other 28 moneys specified for deposit in the trust fund. Moneys in 29 the trust fund are to be used, subject to their appropriation 30 by the general assembly, by DPH to provide the incentives to 31 support health enterprise zones. 32 The bill creates a health enterprise zone practitioner tax 33 credit and a health enterprise zone qualified position tax 34 credit. A health enterprise zone practitioner who practices 35 -13- LSB 5529XS (24) 85 pf/sc 13/ 14

S.F. 2238 in a health enterprise zone may be eligible for a tax credit 1 against state individual income taxes in accordance with the 2 approved health enterprise zone application if the individual 3 accepts and provides care for patients in the health enterprise 4 zone, including those enrolled in the medical assistance 5 program or those who are uninsured, and meets any other 6 criteria established for the health enterprise zone program. 7 Additionally, a nonprofit community-based organization or 8 a local government agency that submits an application for 9 designation as a health enterprise zone and is approved by 10 the director, may also submit to the department a request for 11 certification of eligibility for an income tax credit on behalf 12 of a health enterprise zone practitioner practicing or seeking 13 to practice in the health enterprise zone. 14 In addition, a health enterprise zone practitioner may claim 15 a refundable credit of up to $10,000 for hiring an individual 16 for a qualified position in the health enterprise zone, as 17 certified by the department for the taxable year. 18 Eligibility for the certification for the tax credits is 19 limited by the availability of funds appropriated for that 20 purpose, as determined by DPH. Certificates of eligibility for 21 one or both tax credits are subject to approval by DPH on a 22 first-come, first-served basis, as determined by rule of the 23 department. DPH, in consultation with the director of revenue, 24 is directed to adopt rules to implement the tax credit. 25 The tax credits created apply to tax years beginning on or 26 after January 1, 2015. 27 -14- LSB 5529XS (24) 85 pf/sc 14/ 14