THE SENATE	S.B. NO.	3202
THIRTY-THIRD LEGISLATURE, 2026
STATE OF HAWAII

A BILL FOR AN ACT

relating to health care.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The legislature finds that there is a shortage of health care providers in the State, including primary care providers and specialty providers, which will be exacerbated by the projected retirement of existing physicians, advanced practice registered nurses, pharmacists, and other health care workers. Although students are interested in pursuing careers in Hawaii's health care service industry, in-state educational institutions are constrained by the lack of clinical education sites in the State and the limited supply of expert clinicians who volunteer as qualified preceptors. One way to encourage the participation of preceptors is to offer an income tax credit for health care professionals who serve as preceptors.

The purpose of the existing healthcare preceptor income tax credit is to incentivize volunteer preceptors to offer professional instruction, training, and supervision to students and residents seeking careers as health care providers in the State. The legislature finds that although many providers have trained eligible students, modifications to the existing program will amplify the success of the program.

The legislature further finds that the preceptor tax credit program has been successful in facilitating the growth of the preceptor program. The five-year evaluation of the program found a seventy-seven per cent increase in active preceptors who taught at least one rotation, and seventy-six providers started precepting during this five-year period. The evaluation also recommended that, to improve the function of the program, additional health care provider professions that have established graduate schools in Hawaii should be added to the tax credit eligibility, the primary care specialty requirement for preceptors should be removed, and the requirement that the preceptor credit should be only for precepting students enrolled in a primary care program should be removed.

The legislature recognizes that removing the primary care specialty provision expands the program to specialty areas and also elevates the training opportunities in primary care. Programs training future health care providers in primary care benefit by exposing students to technical training in focused specialty areas like cardiology, pulmonology, and behavioral health. The legislature further recognizes that the health care workforce has shortages in professions beyond those included in the tax credit and whose workforce expansion is also limited by available preceptors, including social workers, physician assistants, and licensed dietitians, as well as workers in high-demand specialties, such as behavioral health. Furthermore, the advanced training environments, such as residencies, provide an extended safety net for new-career health care professionals and rely on preceptors for mentorship and clinical advancement of the residents. As such, the healthcare preceptor tax credit should not be limited to medical, advanced practice registered nurse, and pharmacy students. Rather, the program should expand to apply to physician assistants, licensed dieticians, and social workers and include qualified residency programs for eligible professions.

Finally, the legislature finds that the definition of "volunteer-based supervised clinical training rotation" should be clarified to facilitate the preceptor credit assurance committee's implementation of the tax credit.

Accordingly, the purpose of this Act is to:

(1) Amend the healthcare preceptor tax credit to improve accessibility and further promote the education of health care professionals by:

(A) Removing language limiting access to only those in primary care;

(B) Adding physician assistants, licensed dietitians, and social workers as eligible preceptors and students; and

(C) Expanding eligibility to residency and fellowship programs; and

(2) Revise the membership of the preceptor credit assurance committee to include the director of health and representatives of residency programs with eligible students.

SECTION 2. Section 235-110.25, Hawaii Revised Statutes, is as follows:

1. By amending subsection (e) to read:

"(e) If in any taxable year the annual amount of certified credits for all taxpayers reaches $1,500,000 in the aggregate, the preceptor credit assurance committee shall immediately discontinue certifying credits and notify the department of taxation. In no instance shall the preceptor credit assurance committee certify a total amount of credits exceeding $1,500,000 per taxable year. To comply with this restriction, the preceptor credit assurance committee shall certify or deny credits in the order submitted for certification; provided that credits shall not be submitted for certification [prior to] before the volunteer-based supervised clinical training rotation being performed."

2. By amending subsection (g) to read:

"(g) For the purposes of this section:

"Academic program" means an academic degree granting program or graduate medical education program that:

(1) Holds either its principal accreditation or a physical location in Hawaii; and

(2) Provides education to students, of whom more than fifty per cent are residents of Hawaii.

"Advanced practice registered nurse student" means an individual participating in a nationally accredited academic program that is for the education of advanced practice registered nurses and recognized by the state board of nursing pursuant to chapter 457. "Advanced practice registered nurse student" includes a graduate from a nationally accredited academic program who has continued their training in the role of resident or fellow.

"Dietetics student" means an individual participating in an academic program that is nationally accredited for the training of individuals to become registered dietitians pursuant to chapter 448B. "Dietetics student" includes students enrolled in nationally accredited academic programs that require supervised practice hours.

"Eligible professional degree or training certificate" means a degree or certificate that fulfills a requirement to be a licensed dietitian, pursuant to chapter 448B; a physician or an osteopathic physician, pursuant to chapter 453[,]; a physician assistant pursuant to chapter 453; an advanced practice registered nurse, pursuant to chapter 457[, or]; a registered pharmacist, pursuant to chapter 461[.]; or a social worker, pursuant to chapter 467E.

"Eligible student" means an advanced practice registered nurse student, dietetics student, medical student, [or] pharmacy student, physician assistant student, or social work student, or resident, who is enrolled in an eligible academic program[.], residency program, or fellowship.

"Medical student" means an individual participating in a nationally accredited academic program leading to the medical doctor or doctor of osteopathy degree. "Medical student" includes [graduates] a graduate from a nationally accredited academic [programs] program who [have] has continued their training, in the role of resident or fellow, to obtain the additional qualifications needed for medical licensure, pursuant to chapter 453, or specialty certification.

"Nationally accredited" means holding an institutional accreditation by name to offer post-secondary medical [primary care] education. Accreditation [for medical students] shall be offered as follows:

(1) For medical students, by the Liaison Committee on Medical Education [or], American Osteopathic Association Commission on Osteopathic College Accreditation[. Accreditation for advanced practice registered nurse students shall be offered], or any other accreditation body recognized by the preceptor credit assurance committee;

(2) For advanced practice registered nurse students, by the Commission on Collegiate Nursing Education[.] or any other accreditation body recognized by the preceptor credit assurance committee;

(3) For nursing residency programs, by the Commission on Collegiate Nursing Education, American Nurses Credentialing Center, Consortium for Advanced Practice Providers, or any other accreditation body recognized by the preceptor credit assurance committee;

(4) For pharmacy students, by the Accreditation Council for Pharmacy Education or any other accreditation body recognized by the preceptor credit assurance committee;

(5) For pharmacy residency programs, by the American Society of Health-System Pharmacists;

(6) For physician assistant students, by the Accreditation Review Commission on Education for the Physician Assistant;

(7) For physician assistant residency programs, by the Consortium for Advanced Practice Providers, Accreditation Review Commission on Education for the Physician Assistant, or any other accreditation body recognized by the preceptor credit assurance committee;

(8) For dietetics students, by the Accreditation Council for Education in Nutrition and Dietetics or any other accreditation body recognized by the preceptor credit assurance committee; and

(9) For social work students, by the Council on Social Work Education or any other accreditation body recognized by the preceptor credit assurance committee.

New or additional accreditation bodies may be eligible; provided that they are recognized by the preceptor credit assurance committee.

"Pharmacy student" means an individual participating in an academic program that is nationally accredited for the training of individuals to become registered pharmacists pursuant to chapter 461. "Pharmacy student" includes a graduate from a nationally accredited academic program who has continued their training in the role of resident or fellow.

"Physician assistant student" means an individual participating in an academic program that is nationally accredited for the education of physician assistants to become a nationally certified and licensed physician assistant pursuant to section 453-5.3. "Physician assistant student" includes a graduate from a nationally accredited academic program who has continued their training in the role of resident or fellow.

"Preceptor" means a licensed dietitian, licensed pursuant to chapter 448B; a physician [or] osteopathic physician, or physician assistant, licensed pursuant to chapter 453[,]; an advanced practice registered nurse, licensed pursuant to chapter 457[, or]; a registered pharmacist, licensed pursuant to chapter 461[,]; or a social worker, licensed pursuant to chapter 467E, who is a resident of Hawaii [and who], maintains a professional [primary care] practice in [this] the State[.], and whose specialty supports the development and training of an eligible student for clinical health care practice.

["Primary care" means the principal point of continuing care for patients provided by a healthcare provider, including health promotion, disease prevention, health maintenance, counseling, patient education, diagnosis and treatment of acute and chronic illnesses, and coordination of other specialist care that the patient may need.]

"Residency program" means a residency or fellowship program that provides continuing training for eligible professions, in the role of resident or fellow, to obtain the additional qualifications that support professional practice. "Residency program" includes a program offered through academic programs or employers; provided that the program is nationally accredited and holds either its principal accreditation or a physical location in the State.

"Social work student" means an individual participating in an academic program that is nationally accredited for the training of individuals to become a social worker licensed pursuant to chapter 467E. "Social work student" includes a graduate from a nationally accredited academic program who has continued their training in the role of resident or fellow.

"Volunteer-based supervised clinical training rotation" means [an uncompensated] a period of supervised clinical training [of] to an eligible student that totals at least eighty hours of supervisory time annually, in which a preceptor provides personalized instruction, training, and supervision to an eligible student to enable the eligible student to obtain an eligible professional degree or training certificate[.]; provided that, while a preceptor may be compensated for providing standard clinical services, the preceptor shall be uncompensated for:

(1) Clinical training above or beyond clinical salary or reimbursements for clinical services; and

(2) Provision of clinical training services from tuition funds or from state general funds."

SECTION 3. Section 321-2.7, Hawaii Revised Statutes, is amended as follows:

1. By amending subsections (a) and (b) to read:

"(a) There is established the preceptor credit assurance committee within the department of health. The committee shall develop and implement a plan for certifying healthcare preceptor tax credits under section 235-110.25, including:

(1) Developing a process ensuring that requests for credit certification are reviewed and verifications are processed no later than thirty days following the close of each calendar year; and

(2) Developing the documentation process for the committee to certify a preceptor for the tax credit; provided that the documentation to be collected shall include:

(A) The preceptor's name, address, place of practice, and Hawaii provider license number;

(B) Dates and hours of volunteer-based supervised clinical training rotation per eligible student;

(C) Attestation that the preceptor is uncompensated for the volunteer-based supervised clinical training rotation; [and] provided that, if the preceptor is compensated for providing standard clinical services, attestation that the preceptor is uncompensated for:

(i) Clinical training above or beyond clinical salary or reimbursements for clinical services; and

(ii) Provision of clinical training services from tuition funds or from state general funds; and

(D) Other information deemed necessary by the committee.

(b) The committee shall be composed of [representatives of]:

(1) The director of health, or the director's designee; and

(2) Representatives of:

[(1)] (A) The Hawaii/Pacific basin area health education center;

[(2)] (B) The center for nursing; [and]

[(3)] (C) Academic programs with eligible students[.]; and

(D) Residency programs with eligible students."

2. By amending subsection (e) to read:

"(e) As used in this section, "academic program", "eligible student", "preceptor", "residency program", and "volunteer-based supervised clinical training rotation" [shall] have the same meanings as in section 235-110.25."

SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 5. This Act shall take effect upon its approval; provided that section 2 shall apply to taxable years beginning after December 31, 2026.

INTRODUCED BY:

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Report Title:

Healthcare Preceptor Tax Credit; Licensed Dietitians; Physician Assistants; Social Workers; Residency Programs; Preceptor Credit Assurance Committee

Description:

Amends the Healthcare Preceptor Tax Credit to remove language limiting access only to those practicing in primary care, to add licensed dietitians, physician assistants, and social workers as eligible preceptors and students, and to include residency and followship programs. Adds the Director of Health and a representative of residency programs with eligible students to the Preceptor Credit Assurance Committee. Applies to taxable years beginning after 12/31/2026.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.