SB 1550 — AN ACT CONCERNING THE APPLICABILITY OF THE HOSPITAL TAX TO CHILDREN'S GENERAL HOSPITALS.

Senate General Assembly RaisedFile Bill No.

1550878 January Session, 2025 LCOSenate Bill No.

68081550 ReferredSenate, toMay 12, 2025 The Committee on FINANCE,Finance, REVENUERevenue ANDand BONDINGBonding Introducedreported by:through SEN.

(FIN)FONFARA ANof ACTthe CONCERNING1st THEDist., APPLICABILITYChairperson OFof THEthe HOSPITALCommittee TAXon TOthe CHILDREN'Spart GENERALof HOSPITALS.the Senate, that the bill ought to pass.

AN ACT CONCERNING THE APPLICABILITY OF THE HOSPITAL TAX TO CHILDREN'S GENERAL HOSPITALS.

Any hospital for which the Centers for Medicare and Medicaid Services denies an exemption shall be deemed to be a hospital for purposes of this section and shall be LCOSB1550 6808/ 1File of 2 Raised Bill No.

1550878 required1 toSB1550 payFile theNo. net revenue tax imposed under subsection (a) of this section on inpatient hospital services and outpatient hospital services at the same effective rates set forth in subsection (a) of this section.

878 required to pay the net revenue tax imposed under subsection (a) of this section on inpatient hospital services and outpatient hospital services at the same effective rates set forth in subsection (a) of this section.

Section 1 July 1, 2026 12-263q(b) FIN Joint Favorable LCOSB1550 6808/ 2File ofNo. 2

878 2 SB1550 File No.

878 The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose.

In general, fiscal impacts are based upon a variety of informational sources, including the analyst’s professional knowledge.

Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.

OFA Fiscal Note State Impact:

Agency Affected Fund-Effect FY 26 $ FY 27 $ Revenue Serv., Dept.

GF - Revenue None 23 million Gain Social Services, Dept.

GF - Cost None 23 million Resources of the General Fund GF - Revenue None 15.5 million Gain Note:

GF=General Fund Municipal Impact:

None Explanation The bill results in an estimated net revenue gain to the state of $15.5 million annually beginning in FY 27 by extending the hospital provider tax to children's general hospitals.

It is anticipated that the bill will generate $23 million annually in hospital provider tax revenue.

It is also anticipated that there would be acorrespondinghospitalsupplementalpaymentof$23millionannually through the Department of Social Services.

This anticipated hospital supplemental payment will in turn generate a federal grant revenue gain estimated to be $15.5 million annually.

The Out Years The annualized ongoing fiscal impact identified above would continue into the future at this rate unless modified through changes in state statute or changes in federal policy.

SB1550 / File No.

878 3 SB1550 File No.

878 OLR Bill Analysis SB 1550 AN ACT CONCERNING THE APPLICABILITY OF THE HOSPITAL TAX TO CHILDREN'S GENERAL HOSPITALS.

SUMMARY This bill subjects children’s general hospitals to the hospital provider tax starting on July 1, 2026 (FY 27).

Under the bill, children’s general hospitals that were exempt from the tax before July 1, 2026, must pay thetaxoninpatientandoutpatienthospitalservicesatthesameeffective rates imposed on other hospitals.

Under existing law, the effective rates for FY 27 are generally (1) 6% for inpatient hospital services and (2) 10.4858% for outpatient hospital services, based on each hospital’s FY 16 audited net revenue attributed to these services.

By law, these rates may be subject to specific adjustments and recalculations (e.g., if a hospital dissolves or ceases to be subject to the tax).

The bill makes a conforming change by eliminating the requirement that the Department of Social Services commissioner seek approval from the Centers for Medicare and Medicaid Services to exempt children’s general hospitals from the tax.

By law, and under the bill, “children’s general hospitals” are health care facilities licensed by the Department of Public Health as short-term children’s hospitals.

They exclude specialty hospitals.

EFFECTIVE DATE:

July 1, 2026 BACKGROUND Related Bill sSB 1246, §§ 8 & 9, favorably reported by the Finance, Revenue and Bonding Committee, updates the base year for calculating the hospital provider tax for FY 27 and after.

Principally, it sets the tax rate and base SB1550 / File No.

878 4 SB1550 File No.

878 for:

1.

inpatient hospital services at 6% of each hospital’s audited net revenue for the applicable federal fiscal year (FFY) (e.g., FFY 24 for state FYs 27-29) attributable to these services and 2.