A BILL TO BE ENTITLED
AN ACT TO PROVIDE A TAX CREDIT FOR MEDICAL CARE PROVIDERS TO THE EXTENT THEIR MALPRACTICE INSURANCE PREMIUMS EXCEED AN APPROPRIATE AMOUNT.
The General Assembly of North Carolina enacts:
SECTION 1.  Article 3B of Chapter 105 of the General Statutes is amended by adding a new section to read:
"§ 105‑129.16D.  Credit for medical malpractice insurance expenses.
(a)	Distressed Area Practitioners. – A medical care provider that provides medical care services in this State and provides at least seventy‑five percent (75%) of the services in tier one, two, or three enterprise areas is allowed a credit equal to either of the following, at the option of the taxpayer:
(1)	Ten percent (10%) of the amount by which the taxpayer's annual medical liability insurance premiums for the taxable year exceed twenty thousand dollars ($20,000) per practitioner covered by the insurance.
(2)	Twenty percent (20%) of the amount by which the taxpayer's annual medical liability insurance premiums for the taxable year exceed sixty thousand dollars ($60,000) per practitioner covered by the insurance.
(b)	Other Practitioners. – A medical care provider that provides medical care services in this State and provides less than seventy‑five percent (75%) of the services in tier one, two, or three enterprise areas is allowed a credit equal to either of the following, at the option of the taxpayer:
(1)	Five percent (5%) of the amount by which the taxpayer's annual medical liability insurance premiums for the taxable year exceed thirty thousand dollars ($30,000) per practitioner covered by the insurance.
(2)	Ten percent (10%) of the amount by which the taxpayer's annual medical liability insurance premiums for the taxable year exceed seventy thousand dollars ($70,000) per practitioner covered by the insurance.
(c)	Allocation. – If the taxpayer is an individual who is a nonresident or a part‑year resident, the taxpayer must reduce the amount of the credit by multiplying it by the fraction calculated under G.S. 105‑134.5(b) or (c), as appropriate. If the taxpayer is not an individual and is required to apportion its multistate business income to this State, the taxpayer must reduce the amount of the credit by multiplying it by the apportionment fraction used to apportion its business income to this State.
(d)	Definitions. – The following definitions apply in this section:
(1)	Annual medical liability insurance premiums. – The actual amount of insurance premiums paid by the taxpayer during the taxable year for medical malpractice insurance coverage under a claims‑made malpractice insurance policy and for tail insurance.
(2)	Claims‑made malpractice insurance policy. – A medical malpractice liability insurance policy that covers claims that satisfy all of the following conditions:
a.	Are reported during the policy period.
b.	Meet the provisions specified by the policy. 
c.	Are for an incident that occurred during the policy period or occurred before the policy period, as specified by the policy.
(3)	Enterprise tier. – Defined in G.S. 105‑129.2.
(4)	Medical care provider. – Either of the following:
a.	A practitioner.
b.	A professional corporation, professional limited liability company, or partnership authorized by law to provide medical care services in the regular course of business or practice of a profession.
(5)	Medical care services. – The practice of medicine, surgery, and nursing as regulated by Chapter 90 of the General Statutes.
(6)	Practitioner. – A physician, physician's assistant, or nurse authorized by Chapter 90 of the General Statutes to provide medical services in the regular course of business or practice of a profession.
(7)	Tail insurance. – Insurance that covers a medical care provider insured once a claims‑made malpractice insurance policy is canceled, not renewed, or terminated and that covers claims made or asserted after the cancellation or termination for acts relating to the provision of medical care services by the medical care provider occurring during the period the prior malpractice insurance was in effect."
SECTION 2.  This act becomes effective for taxable years beginning on or after January 1, 2005.