HB 264

                                1  HOUSE BILL 264
                                2     57TH LEGISLATURE - STATE OF NEW MEXICO - SECOND SESSION, 2026
                                3  INTRODUCED BY
                                4  Mark Duncan and Mark B. Murphy and Jonathan A. Henry
                                5  and Rebecca Dow and William A. Hall II
                                6
                                7
                                8
                                9
                                10  AN ACT
                                11   RELATING TO TAXATION; PROVIDING AN INCOME TAX DEDUCTION FOR
                                12   INCOME FROM TIPS, INCOME FROM OVERTIME AND SOCIAL SECURITY
                                13   INCOME DEDUCTIBLE PURSUANT TO FEDERAL LAW; REPEALING THE
                                14   WORKING FAMILIES TAX CREDIT AND ENACTING THE EARNED INCOME TAX
                                15   CREDIT; CREATING THE FOSTER PARENT AND GUARDIAN INCOME TAX
                                16   CREDIT; AMENDING AND EXPANDING AN INCOME TAX DEDUCTION FOR
[bracketed material] = delete
                                17   UNREIMBURSED OR UNCOMPENSATED MEDICAL CARE EXPENSES TO
underscored material = new
                                18   TAXPAYERS OF ALL INCOME LEVELS; EXTENDING A GROSS RECEIPTS TAX
                                19   DEDUCTION FOR HEALTH CARE PRACTITIONERS AND AMENDING THE
                                20   DEDUCTION TO INCLUDE COINSURANCE PAID BY A PATIENT.
                                21
                                22   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
                                23        SECTION 1.   A new section of the Income Tax Act is enacted
                                24   to read:
                                25        "[NEW MATERIAL] DEDUCTION--INCOME FROM QUALIFIED TIPS.--
                                     .232992.4
                                1  A.   A taxpayer may claim a deduction from net income
                                2    in an amount equal to the amount of qualified tips for which
                                3    the taxpayer is eligible to deduct pursuant to 26 U.S.C. 224,
                                4    as that section may be amended or renumbered.
                                5  B.   A taxpayer allowed a deduction pursuant to this
                                6    section shall report the amount of the deduction to the
                                7    department in a manner required by the department.
                                8  C.   The deduction provided by this section shall be
                                9    included in the tax expenditure budget pursuant to Section
                                10   7-1-84 NMSA 1978, including the annual aggregate cost of the
                                11   deduction.
                                12  D.   As used in this section, "qualified tips" means
                                13   "qualified tips" as defined in 26 U.S.C. 224(d)."
                                14        SECTION 2.     A new section of the Income Tax Act is enacted
                                15   to read:
                                16        "[NEW MATERIAL] DEDUCTION--QUALIFIED OVERTIME
[bracketed material] = delete
                                17   COMPENSATION.--
underscored material = new
                                18  A.   A taxpayer may claim a deduction from net income
                                19   in an amount equal to the amount of qualified overtime
                                20   compensation for which the taxpayer is eligible to deduct
                                21   pursuant to 26 U.S.C. 225, as that section may be amended or
                                22   renumbered.
                                23  B.   A taxpayer allowed a deduction pursuant to this
                                24   section shall report the amount of the deduction to the
                                25   department in a manner required by the department.
                                     .232992.4
                                                                     - 2 -
                                1  C.   The deduction provided by this section shall be
                                2    included in the tax expenditure budget pursuant to Section
                                3    7-1-84 NMSA 1978, including the annual aggregate cost of the
                                4    deduction.
                                5  D.   As used in this section, "qualified overtime
                                6    compensation" means "qualified overtime compensation" as
                                7    defined in 26 U.S.C. 225(c)."
                                8  SECTION 3.     A new section of the Income Tax Act is enacted
                                9    to read:
                                10        "[NEW MATERIAL] DEDUCTION--SOCIAL SECURITY INCOME
                                11   DEDUCTIBLE PURSUANT TO FEDERAL LAW.--
                                12  A.   A taxpayer may claim a deduction from net income
                                13   in an amount equal to the amount of social security income for
                                14   which the taxpayer is eligible to deduct pursuant to 26 U.S.C.
                                15   151, as that section may be amended or renumbered.
                                16  B.   A taxpayer allowed a deduction pursuant to this
[bracketed material] = delete
                                17   section shall report the amount of the deduction to the
underscored material = new
                                18   department in a manner required by the department.
                                19  C.   The deduction provided by this section shall be
                                20   included in the tax expenditure budget pursuant to Section
                                21   7-1-84 NMSA 1978, including the annual aggregate cost of the
                                22   deduction."
                                23        SECTION 4.     Section 7-2-18.15 NMSA 1978 (being Laws 2007,
                                24   Chapter 45, Section 9, as amended) is repealed and a new
                                25   Section 7-2-18.15 NMSA 1978 is enacted to read:
                                     .232992.4
                                                                     - 3 -
                                1  "7-2-18.15.   [NEW MATERIAL] EARNED INCOME TAX CREDIT.--
                                2  A.   The credit provided by this section may be
                                3    referred to as the "earned income tax credit".       A taxpayer who
                                4    is an eligible individual may claim the earned income tax
                                5    credit against the taxpayer's tax liability imposed pursuant to
                                6    the Income Tax Act in an amount equal to the credit percentage
                                7    of so much of the taxpayer's earned income for the taxable year
                                8    as does not exceed the earned income amount; provided that the
                                9    amount of the credit shall not exceed the excess of:
                                10  (1)   the credit percentage of the earned income
                                11   amount; over
                                12  (2)   the phaseout percentage of so much of the
                                13   adjusted gross income or, if greater, the earned income of the
                                14   taxpayer for the taxable year as exceeds the phaseout amount.
                                15  B.   The credit percentage and the phaseout
                                16   percentage shall be determined as follows:
[bracketed material] = delete
                                17   In the case of a taxpayer  The credit        The phaseout
underscored material = new
                                18   with:  percentage is:    percentage is:
                                19   1 qualifying child  11.55%  4.55%
                                20   2 qualifying children  13.6%  6.15%
                                21   3 or more qualifying children       15.3%  6.15%
                                22   No qualifying children  2.6%  2.1%.
                                23  C.   Except as provided in Subsections E and F of
                                24   this section, the earned income amount and the phaseout amount
                                25   shall be determined as follows:
                                     .232992.4
                                                                     - 4 -
                                1    In the case of a taxpayer  The earned  The phaseout
                                2    with:  income amount      amount is:
                                3  is:
                                4    1 qualifying child  $11,000  $36,000
                                5    2 or more qualifying children      $15,000  $40,000
                                6    No qualifying children  $8,000  $25,000.
                                7  D.   For married individuals filing joint returns,
                                8    the phaseout amount shall be increased by five thousand dollars
                                9    ($5,000).
                                10  E.   Except as provided in Subsection F of this
                                11   section, if the greater of an eligible individual's earned
                                12   income or adjusted gross income is less than the earned income
                                13   amount and the amount of credit is less than one hundred
                                14   dollars ($100), the amount of the credit shall be one hundred
                                15   dollars ($100).
                                16  F.   For the 2027 taxable year and each subsequent
[bracketed material] = delete
                                17   taxable year, the earned income amounts and phaseout amounts
underscored material = new
                                18   shown in the table in Subsection C of this section, the amount
                                19   of credit provided in Subsection E of this section and the
                                20   phaseout amount provided in Subsection D of this section shall
                                21   be adjusted to account for inflation.       The department shall
                                22   make the adjustment by multiplying each amount of credit by a
                                23   fraction, the numerator of which is the consumer price index
                                24   ending during the prior taxable year and the denominator of
                                25   which is the consumer price index ending in taxable year 2026.
                                     .232992.4
                                                                     - 5 -
                                1    The result of the multiplication shall be rounded to the
                                2    nearest ten dollars ($10.00), except that if the result would
                                3    be an amount less than the corresponding amount for the
                                4    preceding taxable year, then no adjustment shall be made.
                                5  G.   The secretary shall reflect the provisions of
                                6    Subsections B and C of this section in tables that shall have
                                7    income brackets of not greater than fifty dollars ($50.00) each
                                8    for:
                                9  (1)   earned income between zero and the amount
                                10   of earned income at which the credit is phased out under
                                11   Subsection C of this section; and
                                12  (2)   adjusted gross income between the dollar
                                13   amount at which the phaseout begins under Subsection C of this
                                14   section and the amount of adjusted gross income at which the
                                15   credit is phased out under that subsection.
                                16  H.   That portion of credit that exceeds a taxpayer's
[bracketed material] = delete
                                17   tax liability in the taxable year in which the credit is
underscored material = new
                                18   claimed shall be refunded to the taxpayer.    A refund made to a
                                19   taxpayer pursuant to this section shall not be treated as
                                20   income.
                                21  I.   A taxpayer allowed a tax credit pursuant to this
                                22   section shall report the amount of the credit to the department
                                23   in a manner required by the department.
                                24  J.   The credit provided by this section shall be
                                25   included in the tax expenditure budget pursuant to Section
                                     .232992.4
                                                                    - 6 -
                                1    7-1-84 NMSA 1978, including the total annual aggregate cost of
                                2    the credit.
                                3  K.   As used in this section:
                                4  (1)   "earned income" means "earned income" as
                                5    defined in 26 U.S.C. 32(c)(2);
                                6  (2)   "eligible individual" means a resident who
                                7    is an "eligible individual" pursuant to the federal earned
                                8    income tax credit who is eligible to claim the federal earned
                                9    income tax credit in the taxable year;
                                10  (3)   "federal earned income tax credit" means
                                11   the federal tax credit allowed pursuant to 26 U.S.C. 32, as
                                12   that section may be amended or renumbered; and
                                13  (4)   "qualifying child" means "qualifying
                                14   child" as defined by Section 152(c) of the Internal Revenue
                                15   Code, as that section may be amended or renumbered, but
                                16   includes any minor child or stepchild of the taxpayer who would
[bracketed material] = delete
                                17   be a qualifying child for federal income tax purposes if the
underscored material = new
                                18   public assistance contributing to the support of the child or
                                19   stepchild was considered to have been contributed by the
                                20   taxpayer."
                                21        SECTION 5.     A new section of the Income Tax Act is enacted
                                22   to read:
                                23        "[NEW MATERIAL] CREDIT--FOSTER PARENT AND GUARDIAN INCOME
                                24   TAX CREDIT.--
                                25  A.   For taxable years ending prior to January 1,
                                     .232992.4
                                                                     - 7 -
                                1    2032, a taxpayer who is a resident, who is not a dependent of
                                2    another individual and who is a foster parent or guardian of a
                                3    child may claim a credit against the taxpayer's tax liability
                                4    imposed pursuant to the Income Tax Act.    The credit authorized
                                5    pursuant to this section may be referred to as the "foster
                                6    parent and guardian income tax credit".
                                7  B.   The amount of the tax credit shall be in an
                                8    amount equal to two hundred fifty dollars ($250) for each month
                                9    the taxpayer is a foster parent or guardian of a child in the
                                10   taxable year in which the tax credit is claimed; provided that
                                11   the taxpayer shall be a foster parent or guardian for more than
                                12   fifty percent of that month; and provided further that the
                                13   maximum amount of credit that may be claimed by a taxpayer in a
                                14   taxable year is three thousand dollars ($3,000).
                                15  C.   A taxpayer shall apply for certification of
                                16   eligibility for the tax credit from the children, youth and
[bracketed material] = delete
                                17   families department on forms and in the manner prescribed by
underscored material = new
                                18   that department.    Except as provided in Subsection E of this
                                19   section, only one tax credit shall be certified per taxpayer
                                20   per taxable year.    If the children, youth and families
                                21   department determines that the taxpayer meets the requirements
                                22   of this section, that department shall issue a dated
                                23   certificate of eligibility to the taxpayer providing the amount
                                24   of tax credit for which the taxpayer is eligible and the
                                25   taxable years in which the credit may be claimed.    The
                                     .232992.4
                                                                    - 8 -
                                1    children, youth and families department shall provide the
                                2    department with the certificates of eligibility issued pursuant
                                3    to this subsection in an electronic format at regularly agreed-
                                4    upon intervals.
                                5  D.   That portion of the tax credit that exceeds a
                                6    taxpayer's income tax liability in the taxable year in which
                                7    the credit is claimed shall be refunded to the taxpayer.
                                8  E.   Married individuals filing separate returns for
                                9    a taxable year for which they could have filed a joint return
                                10   may each claim only one-half of the tax credit that would have
                                11   been claimed on a joint return.
                                12  F.   A taxpayer allowed to claim a tax credit
                                13   pursuant to this section shall claim the tax credit in a manner
                                14   required by the department.    The credit shall be claimed within
                                15   one taxable year of the end of the year in which the children,
                                16   youth and families department certifies the credit.
[bracketed material] = delete
                                17  G.   The credit provided by this section shall be
underscored material = new
                                18   included in the tax expenditure budget pursuant to Section
                                19   7-1-84 NMSA 1978, including the annual aggregate cost of the
                                20   credit.
                                21  H.   As used in this section:
                                22  (1)   "child" means an unemancipated individual
                                23   who has not reached eighteen years of age;
                                24  (2)   "foster parent" means a person licensed or
                                25   certified by the children, youth and families department or a
                                     .232992.4
                                                                    - 9 -
                                1    child placement agency to provide care for children in the
                                2    custody of that department or the agency; and
                                3  (3)   "guardian" means a person appointed as a
                                4    guardian by a court or an Indian tribal authority pursuant to
                                5    the Kinship Guardianship Act, but does not include a person
                                6    appointed as a guardian ad litem."
                                7  SECTION 6.     Section 7-2-37 NMSA 1978 (being Laws 2015 (1st
                                8    S.S.), Chapter 2, Section 3) is amended to read:
                                9  "7-2-37.     DEDUCTION--UNREIMBURSED OR UNCOMPENSATED MEDICAL
                                10   CARE EXPENSES.--
                                11  A.    [Prior to January 1, 2025] A taxpayer may claim
                                12   a deduction from net income in an amount [determined pursuant
                                13   to Subsection B of this section for medical care] equal to
                                14   medical expenses paid during the taxable year for medical care
                                15   of the taxpayer, the taxpayer's spouse or a dependent if the
                                16   expenses are not reimbursed or compensated for by insurance or
[bracketed material] = delete
                                17   otherwise and have not been included in the taxpayer's itemized
underscored material = new
                                18   deductions, as defined in Section 63 of the Internal Revenue
                                19   Code, for the taxable year.
                                20  [B.    The deduction provided in Subsection A of this
                                21   section may be claimed in an amount equal to the following
                                22   percentage of medical care expenses paid during the taxable
                                23   year based on the taxpayer's filing status and adjusted gross
                                24   income as follows:
                                25  (1)   for surviving spouses and married
                                     .232992.4
                                                                     - 10 -
                                1    individuals filing joint returns:
                                2    If adjusted gross income is:  The following percent of
                                3  medical care expenses
                                4  paid may be deducted:
                                5    Not over $30,000  25 percent
                                6    More than $30,000 but not
                                7    more than $70,000  15 percent
                                8    Over $70,000  10 percent;
                                9  (2)   for single individuals and married
                                10   individuals filing separate returns:
                                11   If adjusted gross income is:  The following percent of
                                12  medical care expenses
                                13  paid may be deducted:
                                14   Not over $15,000  25 percent
                                15   More than $15,000 but not more than
                                16   $35,000  15 percent
[bracketed material] = delete
                                17   Over $35,000  10 percent; and
underscored material = new
                                18  (3)   for heads of household:
                                19   If adjusted gross income is:  The following percent of
                                20  medical care expenses
                                21  paid may be deducted:
                                22   Not over $20,000  25 percent
                                23   More than $20,000 but not more than
                                24   $50,000  15 percent
                                25   Over $50,000  10 percent.]
                                     .232992.4
                                                                     - 11 -
                                1  B.   A taxpayer allowed a deduction pursuant to this
                                2    section shall report the amount of the deduction to the
                                3    department in a manner required by the department.
                                4  C.   The deduction provided by this section shall be
                                5    included in the tax expenditure budget pursuant to Section
                                6    7-1-84 NMSA 1978, including the annual aggregate cost of the
                                7    deduction.
                                8  [C.] D.     As used in this section:
                                9  (1)    "dependent" means "dependent" as defined
                                10   in Section 152 of the Internal Revenue Code;
                                11  (2)    "health care facility" means a hospital,
                                12   outpatient facility, diagnostic and treatment center,
                                13   rehabilitation center, free-standing hospice or other similar
                                14   facility at which medical care is provided;
                                15  (3)    "medical care" means the diagnosis, cure,
                                16   mitigation, treatment or prevention of disease or for the
[bracketed material] = delete
                                17   purpose of affecting any structure or function of the body;
underscored material = new
                                18  (4)    "medical care expenses" means amounts paid
                                19   for:
                                20  (a)   the diagnosis, cure, mitigation,
                                21   treatment or prevention of disease or for the purpose of
                                22   affecting any structure or function of the body, excluding
                                23   cosmetic surgery, if provided by a physician or in a health
                                24   care facility;
                                25  (b)   prescribed drugs or insulin;
                                     .232992.4
                                                                      - 12 -
                                1  (c)   qualified long-term care services as
                                2    defined in Section 7702B(c) of the Internal Revenue Code;
                                3  (d)   insurance covering medical care,
                                4    including amounts paid as premiums under Part B of Title 18 of
                                5    the federal Social Security Act or for a qualified long-term
                                6    care insurance contract defined in Section 7702B(b) of the
                                7    Internal Revenue Code, if the insurance or other amount is paid
                                8    from income included in the taxpayer's adjusted gross income
                                9    for the taxable year;
                                10  (e)   nursing services, regardless of
                                11   where the services are rendered, if provided by a practical
                                12   nurse or a professional nurse licensed to practice in the state
                                13   pursuant to the Nursing Practice Act;
                                14  (f)   specialized treatment or the use of
                                15   special therapeutic devices if the treatment or device is
                                16   prescribed by a physician and the patient can show that the
[bracketed material] = delete
                                17   expense was incurred primarily for the prevention or
underscored material = new
                                18   alleviation of a physical or mental defect or illness; and
                                19  (g)   care in an institution other than a
                                20   hospital, such as a sanitarium or rest home, if the principal
                                21   reason for the presence of the person in the institution is to
                                22   receive the medical care available; provided that if the meals
                                23   and lodging are furnished as a necessary part of such care, the
                                24   cost of the meals and lodging are "medical care expenses";
                                25  (5)     "physician" means a medical doctor,
                                     .232992.4
                                                                    - 13 -
                                1    osteopathic physician, dentist, [podiatrist] podiatric
                                2    physician, chiropractic physician or psychologist licensed or
                                3    certified to practice in New Mexico; and
                                4  (6)   "prescribed drug" means a drug or
                                5    biological that requires a prescription of a physician for its
                                6    use by an individual."
                                7  SECTION 7.     Section 7-9-93 NMSA 1978 (being Laws 2004,
                                8    Chapter 116, Section 6, as amended) is amended to read:
                                9  "7-9-93.     DEDUCTION--GROSS RECEIPTS--CERTAIN RECEIPTS FOR
                                10   SERVICES PROVIDED BY HEALTH CARE PRACTITIONER OR ASSOCIATION OF
                                11   HEALTH CARE PRACTITIONERS.--
                                12  A.   Receipts of a health care practitioner or an
                                13   association of health care practitioners for commercial
                                14   contract services or medicare part C services paid by a managed
                                15   care organization or health care insurer may be deducted from
                                16   gross receipts if the services are within the scope of practice
[bracketed material] = delete
                                17   of the health care practitioner providing the service.
underscored material = new
                                18   Receipts from fee-for-service payments by a health care insurer
                                19   may not be deducted from gross receipts.
                                20  B.   Prior to July 1, [2028] 2032, receipts from
                                21   coinsurance, a copayment or deductible paid by an insured or
                                22   enrollee to a health care practitioner or an association of
                                23   health care practitioners for commercial contract services
                                24   pursuant to the terms of the insured's health insurance plan or
                                25   enrollee's managed care health plan may be deducted from gross
                                     .232992.4
                                                                    - 14 -
                                1    receipts if the services are within the scope of practice of
                                2    the health care practitioner providing the service.
                                3  C.   The deductions provided by this section shall be
                                4    applied only to gross receipts remaining after all other
                                5    allowable deductions available under the Gross Receipts and
                                6    Compensating Tax Act have been taken.
                                7  D.   A taxpayer allowed a deduction pursuant to this
                                8    section shall report the amount of the deduction separately in
                                9    a manner required by the department.
                                10  E.   The deductions provided by this section shall be
                                11   included in the tax expenditure budget pursuant to Section
                                12   7-1-84 NMSA 1978 with an analysis of the cost of the
                                13   deductions.
                                14  F.   As used in this section:
                                15  (1)   "association of health care practitioners"
                                16   means a corporation, an unincorporated business entity or other
[bracketed material] = delete
                                17   legal entity organized by, owned by or employing one or more
underscored material = new
                                18   health care practitioners; provided that the entity is not:
                                19  (a)   an organization granted exemption
                                20   from the federal income tax by the United States commissioner
                                21   of internal revenue as organizations described in Section
                                22   501(c)(3) of the United States Internal Revenue Code of 1986,
                                23   as that section may be amended or renumbered; or
                                24  (b)   a health maintenance organization, a
                                25   hospital, a hospice, a nursing home or an entity that is solely
                                     .232992.4
                                                                    - 15 -
                                1    an outpatient facility or intermediate care facility licensed
                                2    pursuant to the [Public Health Act] Health Care Code;
                                3  (2)   "commercial contract services" means
                                4    health care services performed by a health care practitioner
                                5    pursuant to a contract with a managed care organization or
                                6    health care insurer other than those health care services
                                7    provided for medicare patients pursuant to Title 18 of the
                                8    federal Social Security Act or for medicaid patients pursuant
                                9    to Title 19 or Title 21 of the federal Social Security Act;
                                10  (3)   "copayment" or "coinsurance" means [a
                                11   fixed dollar] an amount that a health care insurer or managed
                                12   care health plan requires an insured or enrollee to pay upon
                                13   incurring an expense for receiving medical services;
                                14  (4)   "deductible" means the amount of covered
                                15   charges an insured or enrollee is required to pay in a plan
                                16   year for commercial contract services before the insured's
[bracketed material] = delete
                                17   health insurance plan or enrollee's managed care health plan
underscored material = new
                                18   begins to pay for applicable covered charges;
                                19  (5)   "fee-for-service" means payment for health
                                20   care services by a health care insurer for covered charges
                                21   under an indemnity insurance plan;
                                22  (6)   "health care insurer" means a person that:
                                23  (a)   has a valid certificate of authority
                                24   in good standing pursuant to the New Mexico Insurance Code to
                                25   act as an insurer, a health maintenance organization or a
                                     .232992.4
                                                                  - 16 -
                                1    nonprofit health care plan or prepaid dental plan; and
                                2  (b)   contracts to reimburse licensed
                                3    health care practitioners for providing basic health services
                                4    to enrollees at negotiated fee rates;
                                5  (7)   "health care practitioner" means:
                                6  (a)   a chiropractic physician licensed
                                7    pursuant to the provisions of the Chiropractic Physician
                                8    Practice Act;
                                9  (b)   a dentist or dental hygienist
                                10   licensed pursuant to the Dental Health Care Act;
                                11  (c)   a doctor of oriental medicine
                                12   licensed pursuant to the provisions of the Acupuncture and
                                13   Oriental Medicine Practice Act;
                                14  (d)   an optometrist licensed pursuant to
                                15   the provisions of the Optometry Act;
                                16  (e)   an osteopathic physician licensed
[bracketed material] = delete
                                17   pursuant to the provisions of the Medical Practice Act;
underscored material = new
                                18  (f)   a physical therapist licensed
                                19   pursuant to the provisions of the Physical Therapy Act;
                                20  (g)   a physician or physician assistant
                                21   licensed pursuant to the provisions of the Medical Practice
                                22   Act;
                                23  (h)   a podiatric physician licensed
                                24   pursuant to the provisions of the Podiatry Act;
                                25  (i)   a psychologist licensed pursuant to
                                     .232992.4
                                                                  - 17 -
                                1    the provisions of the Professional Psychologist Act;
                                2  (j)   a registered lay midwife registered
                                3    by the department of health;
                                4  (k)   a registered nurse or licensed
                                5    practical nurse licensed pursuant to the provisions of the
                                6    Nursing Practice Act;
                                7  (l)   a registered occupational therapist
                                8    licensed pursuant to the provisions of the Occupational Therapy
                                9    Act;
                                10  (m)   a respiratory care practitioner
                                11   licensed pursuant to the provisions of the Respiratory Care
                                12   Act;
                                13  (n)   a speech-language pathologist or
                                14   audiologist licensed pursuant to the Speech-Language Pathology,
                                15   Audiology and Hearing Aid Dispensing Practices Act;
                                16  (o)   a professional clinical mental
[bracketed material] = delete
                                17   health counselor, marriage and family therapist or professional
underscored material = new
                                18   art therapist licensed pursuant to the provisions of the
                                19   Counseling and Therapy Practice Act who has obtained a master's
                                20   degree or a doctorate;
                                21  (p)   an independent social worker
                                22   licensed pursuant to the provisions of the Social Work Practice
                                23   Act; and
                                24  (q)   a clinical laboratory that is
                                25   accredited pursuant to 42 U.S.C. Section 263a but that is not a
                                     .232992.4
                                                                    - 18 -
                                1    laboratory in a physician's office or in a hospital defined
                                2    pursuant to 42 U.S.C. Section 1395x;
                                3  (8)   "managed care health plan" means a health
                                4    care plan offered by a managed care organization that provides
                                5    for the delivery of comprehensive basic health care services
                                6    and medically necessary services to individuals enrolled in the
                                7    plan other than those services provided to medicare patients
                                8    pursuant to Title 18 of the federal Social Security Act or to
                                9    medicaid patients pursuant to Title 19 or Title 21 of the
                                10   federal Social Security Act;
                                11  (9)   "managed care organization" means a person
                                12   that provides for the delivery of comprehensive basic health
                                13   care services and medically necessary services to individuals
                                14   enrolled in a plan through its own employed health care
                                15   providers or by contracting with selected or participating
                                16   health care providers.   "Managed care organization" includes
[bracketed material] = delete
                                17   only those persons that provide comprehensive basic health care
underscored material = new
                                18   services to enrollees on a contract basis, including the
                                19   following:
                                20  (a)   health maintenance organizations;
                                21  (b)   preferred provider organizations;
                                22  (c)   individual practice associations;
                                23  (d)   competitive medical plans;
                                24  (e)   exclusive provider organizations;
                                25  (f)   integrated delivery systems;
                                     .232992.4
                                                                    - 19 -
                                1  (g)   independent physician-provider
                                2    organizations;
                                3  (h)   physician hospital-provider
                                4    organizations; and
                                5  (i)   managed care services organizations;
                                6    and
                                7  (10)   "medicare part C services" means services
                                8    performed pursuant to a contract with a managed health care
                                9    provider for medicare patients pursuant to Title 18 of the
                                10   federal Social Security Act."
                                11  SECTION 8.    APPLICABILITY.--The provisions of Sections 1
                                12   through 6 of this act apply to taxable years beginning on or
                                13   after January 1, 2026.
                                14  SECTION 9.    EFFECTIVE DATE.--The effective date of the
                                15   provisions of Section 7 of this act is July 1, 2026.
                                16  - 20 -
[bracketed material] = delete
                                17
underscored material = new
                                18
                                19
                                20
                                21
                                22
                                23
                                24
                                25
                                     .232992.4