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HB 1674

creating a tax exemption for certain lower-income property owners.

2026 Regular Session Introduced by Heath Howard

The HEART Act creates a state income tax credit to encourage private donations to DoH‑certified rural hospitals, funded by transparent use and oversight of donated funds.

Inexpedient to Legislate: MA VV 02/05/2026 HJ 3 P. 17
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Bill Summary · HB 1674

HB 1674 — Summary (Helping Enhance Access to Rural Treatment (HEART) Act)

Note on source: The provided document mixes material from several different HB 1674 drafts from multiple states. This summary focuses on the Arkansas draft text contained in the packet, which creates an income tax incentive for donations to qualifying rural hospitals (the “HEART Act”). Metadata attached to the submission indicates the bill was introduced December 19, 2024 and the record shows the bill ultimately “Died In Committee.”

Purpose / Intent

Create a state income tax credit to encourage private donations to qualifying rural hospital organizations and establish a Department of Health (DoH) program (the HEART Act) to certify eligible hospitals, oversee use of donated funds, and publish transparency reports. The goal is to enhance financial stability and access to health care in rural counties and for critical access hospitals.

Key provisions

  • New subchapter in Arkansas Code Title 20 (20-12-701 et seq.) establishing the “Helping Enhance Access to Rural Treatment (HEART) Act.”
  • Definitions: “rural county” (population <50,000 by latest decennial census), “critical access hospital,” and detailed criteria for a “rural hospital organization” (e.g., inpatient services in a rural county or critical access designation; participates in Medicaid/Medicare; provides indigent care; at least 10% of net revenue from indigent/charity/bad debt; files IRS Form 990 or equivalent; tax-exempt or county/municipal authority; current with audits/reports).
  • Department of Health duties:
    • Accept and expend donations.
    • Annually (by Dec. 1) certify/approve a list of eligible rural hospital organizations and transmit it to the Department of Finance and Administration (DFA).
    • Publish an operations manual (criteria, deadlines, ranking formula for financial need), the approved list, the annual report, and amounts paid to third-party solicitors/administrators on the DoH website; provide a link to DFA’s corresponding information.
    • Rank hospitals in order of financial need per an established formula.
  • Requirements for rural hospitals:
    • Submit a five-year financial viability plan to DoH to qualify.
    • Use received contributions for healthcare services for rural residents or the area served by a critical access hospital.
    • Report contributions and how funds were spent; disclose payments to third parties.
    • Limit on third‑party solicitation/administration fees: not to exceed 3% of contributions received.
  • Tax code change (Ark. Code Title 26): creates income tax credit (new § 26-51-518) for contributions to DoH‑approved rural hospital organizations. The draft shows:
    • Individuals can claim a credit equal to the actual amount contributed (with some special provisions for pass‑through entity members).
    • Corporations/entities can claim a credit limited to the lesser of the amount contributed or 75% of tax liability. (Tax-credit section in the provided text is truncated; final numeric/eligibility details should be confirmed.)

Who is affected

  • Rural hospital organizations that meet DoH criteria (beneficiaries of contributions).
  • Individual and corporate donors (eligible for state income tax credits).
  • Department of Health and Department of Finance & Administration (administration, certification, reporting).
  • Third‑party fundraisers (limited to 3% fee).
  • State revenue: potential reduction in income tax receipts (fiscal impact not specified in draft).

Procedural / Timeline notes

  • Hospitals must submit five‑year plans to qualify; DoH must publish an approved list annually by December 1.
  • DoH files an annual report to legislative committee chairs and maintains public transparency materials on its website.
  • According to the provided metadata, the bill was introduced December 19, 2024 and later listed as “Died In Committee.” The tax-credit section in the supplied text was truncated; fiscal details and final credit caps/limitations should be confirmed from the full bill text or the companion SB 886.

Compiled from official sources — confirm details with the bill’s official record.

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