Health Enterprise Zones Act

Summary: The Health Enterprise Zones Act enables localities and nonprofits to propose plans for underserved geographic areas where health care practitioners may receive incentives to improve access to and quality of health care.

Based on Maryland SB 234 (2012)

See Health Affairs article The Maryland Health Enterprise Zone Initiative Reduced Hospital Cost And Utilization In Underserved Communities


This Act shall be called the “Health Enterprise Zones Act.”


(A) FINDINGS—The legislature/council find and declare that:

1) The State of [state] is proud of many of its first-class health facilities and doctors. However, the state continues to lag behind others in some key health indicators, such as ranking [insert whatever is appropriate].

2) The State also demonstrates significant disparities in health care and health outcomes. For example, [insert whatever is appropriate].

3) Health disparities exist in urban, suburban, and rural communities in the State, and communities where significant health disparities exist also often face shortages in the primary health care workforce, including nurses.

4) Health disparities are the result of modifiable health care system factors, community factors, and individual factors; and key strategies for reducing and eliminating health disparities include collection and analysis of racial and ethnic data; inclusion of minority communities in health planning and outreach to those communities with health education and health services; cultural and linguistic health competency among service providers; diversity in the health care and public health workforce; access to primary care practitioners; and attention to the social determinants of health.

5) By 2045, over one-half of the U.S. population will be persons of color, and in order to reach health equity and stem the tide of rising health care costs, the State must take advantage of the tools provided by the federal Affordable Care Act to expand access, eliminate disparities, and make ours the healthiest state in the nation.

(B) PURPOSE—This law is enacted to eliminate health care disparities and protect the health of state residents.


After section XXX, the following new section XXX shall be inserted:

(A) DEFINITIONS—For purposes of this section:

2) “Commission” means the [Community Health Resources Commission].

3) “Fund” means the Health Enterprise Zone Reserve Fund established under this subtitle.

5) “Health Enterprise Zone practitioner” means a health care practitioner who is licensed or certified under the [Health Occupations Article] and who provides within the Health Enterprise Zone:

a) Primary care, including obstetrics, gynecological services, pediatric services, or geriatric services;

b) Behavioral health services, including mental health or alcohol and substance abuse services; or

c) Dental services.


1) The [Secretary of Health] may designate a Health Enterprise Zone based on the application of a nonprofit community-based organization or a local government agency. Such a zone shall cover a contiguous geographic area that demonstrates measurable and documented health disparities and poor health outcomes, and is small enough to allow for the incentives offered under this subtitle to have a significant impact on improving health outcomes and reducing health disparities, including racial, ethnic, and geographic health disparities.

2) The application shall contain an effective and sustainable plan to reduce health disparities, reduce costs or produce savings to the health care system, and improve health outcomes, including:

a) A description of the plan to utilize funding available under this subtitle to address health care provider capacity, improve health services delivery, effectuate community improvements, or conduct outreach and education efforts; and

b) A proposal to use funding available under this subtitle to provide for loan repayment incentives to induce Health Enterprise Zone practitioners to practice in the area.

3) The application may also contain a plan to utilize other benefits, including:

a) Tax credits available under this subtitle and [cite] to encourage Health Enterprise Zone practitioners to establish or expand health care practices in the area;

b) A proposal to use innovative public health strategies to reduce health disparities in the area, such as the use of community health workers, health coaches, registered dieticians, optometrists, peer learning, and community-based disease management activities, that could be supported by grants awarded under this subtitle; and

c) A proposal to use other incentives or mechanisms to address health disparities that focus on ways to expand access to care, expand access to fresh produce through grocery stores and farmer’s markets, promote hiring, and reduce costs to the health care system.

4) The Commission shall make recommendations to the Secretary on the designation of Health Enterprise Zones under this subtitle.

5) The Secretary shall consider geographic diversity, among other factors, when designating areas as Health Enterprise Zones and may direct the Commission to conduct outreach efforts to facilitate a geographically diverse pool of applicants, including promoting applications from rural areas.

6) After receiving all applications submitted to the Commission, the Commission shall report to the [Senate Finance Committee] and the [House Health and Government Operations Committee] on the names of applicants and geographic areas in which applicants are located.

7) The Secretary shall give priority to applications that demonstrate the following:

a) Support from and participation of key stakeholders in the public and private sectors, including residents of the area and local government;

b) A plan for long-term funding and sustainability;

c) Inclusion of supporting funds from the private sector;

d) Integration with the State Health Improvement Process and the goals set out in the strategic plan of the local health improvement coalition; and

e) A plan for evaluation of the impact of designation of the proposed area as a Health Enterprise Zone.

8) The Secretary, in consultation with the Commission, may adopt regulations to carry out the provisions of this subtitle and to specify eligibility criteria and application, approval, and monitoring processes for the benefits under this subtitle.


1) Health Enterprise Zone practitioners may receive:

a) Tax credits against the State income tax as provided in [cite];

b) Loan repayment assistance, as provided for in the application for designation for the Health Enterprise Zone and approved by the Secretary under this subtitle; and

c) Priority for the receipt of any State funding available for electronic health records, if feasible and if other standards for receipt of the funding are met.

2) A nonprofit community-based organization or a local government agency that applies on behalf of an area for designation as a Health Enterprise Zone may receive grants, as determined by the Secretary, to implement actions outlined in the organization’s or agency’s application to improve health outcomes and reduce health disparities in the Health Enterprise Zone.

3) A Health Enterprise Zone practitioner may apply to the Secretary for a grant to defray the costs of capital or leasehold improvements to, or medical or dental equipment to be used in, a Health Enterprise Zone if the practitioner shall own or lease the health care facility and provide health care from that facility.

4) A grant to defray the cost of medical or dental equipment may not exceed the lesser of $25,000 or 50% of the cost of the equipment and grants for capital or leasehold improvements shall be for the purposes of improving or expanding the delivery of health care in the Health Enterprise Zone.


1) There is a Health Enterprise Zone Reserve Fund.

2) The Fund is a special, nonlapsing fund.

3) The State Treasurer shall invest the money of the Fund in the same manner as other State money may be invested and any investment earnings of the Fund shall be credited to the General Fund of the State.

4) The money in the Fund shall be used for any activity authorized under this subtitle.

5) The Commission shall administer the Fund and provide funding in accordance with the designation by the Secretary of a Health Enterprise Zone under this subtitle.

(E) REPORT—On or before December 15 of each year, the Commission and the Secretary shall submit to the Governor and the legislature a report that includes:

1) The number and types of incentives granted in each Health Enterprise Zone;

2) Evidence of the impact of the tax and loan repayment incentives in attracting Health Enterprise Zone practitioners to Health Enterprise Zones;

3) Evidence of the impact of the incentives offered in Health Enterprise Zones in reducing health disparities and improving health outcomes; and

4) Evidence of the progress in reducing health costs and hospital admissions and readmissions in Health Enterprise Zones.


This law shall become effective on XXXXXX 1, 2020.