REPORT TITLE:
Long-Term Ins. Income Tax 


DESCRIPTION:
Provides an income tax credit equal to 50 per cent of premium
cost of a long-term care policy.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
THE SENATE                              S.B. NO.           194
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT
RELATING TO INCOME TAXATION.



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

 1      SECTION 1.  Chapter 235, Hawaii Revised Statutes, is amended
 
 2 by adding a new section to be appropriately designated and to
 
 3 read as follows:
 
 4      "§235-     Long-term care insurance tax credit.  (a)  Each
 
 5 resident individual taxpayer who files an income tax return for a
 
 6 taxable year, and who is not claimed or is not otherwise eligible
 
 7 to be claimed as a dependent by another taxpayer for Hawaii state
 
 8 income tax purposes, may claim a long-term care insurance tax
 
 9 credit against the resident taxpayer's income tax liability for
 
10 the taxable year for which the income tax return is being filed.
 
11 The tax credit shall be in an amount equal to fifty per cent of
 
12 the annual premium for a long-term care insurance policy.
 
13      (b)  If the tax credit claimed by the taxpayer under this
 
14 section exceeds the amount of the income tax payments due from
 
15 the taxpayer, the excess of credit over payments due shall be
 
16 refunded to the taxpayer; provided that the tax credit properly
 
17 claimed by a taxpayer who has no income tax liability shall be
 
18 paid to the taxpayer; and provided that no refunds or payments on
 
19 account of the tax credit allowed by this section shall be made
 
20 for amounts less than $1.
 

 
Page 2                                                     
                                     S.B. NO.           194
                                                        
                                                        

 
 1      (c)  The director of taxation shall prepare any forms that
 
 2 may be necessary to claim a credit under this section, may
 
 3 require proof of the claim for the tax credit, and may adopt
 
 4 rules pursuant to chapter 91.
 
 5      (d)  All of the provisions relating to assessments and
 
 6 refunds under this chapter and under section 231-23(c)(1) shall
 
 7 apply to the tax credit under this section.
 
 8      (e)  Claims for the tax credit under this section, including
 
 9 any amended claims, shall be filed on or before the end of the
 
10 twelfth month following the taxable year for which the credit may
 
11 be claimed.
 
12      (f)  As used in this section:
 
13      "Activities of daily living" means:
 
14      (1)  Eating;
 
15      (2)  Toileting;
 
16      (3)  Transferring;
 
17      (4)  Bathing;
 
18      (5)  Dressing; and
 
19      (6)  Continence.
 
20      "Chronically ill individual" means any individual who has
 
21 been certified by a licensed health care practitioner as:
 
22      (1)  Being unable to perform, without substantial assistance
 
23           from another individual, at least two activities of
 

 
Page 3                                                     
                                     S.B. NO.           194
                                                        
                                                        

 
 1           daily living for a period of at least ninety days due
 
 2           to a loss of functional capacity;
 
 3      (2)  Having a level of disability, as determined by a
 
 4           licensed health care practitioner, that is similar to
 
 5           the level of disability described in paragraph (1); or
 
 6      (3)  Requiring substantial supervision to protect the
 
 7           individual from threats to health and safety due to
 
 8           sever cognitive impairment.
 
 9 "Chronically ill individual" shall not include any individual
 
10 otherwise meeting the requirements of the preceding sentence
 
11 unless within the preceding twelve-month period a licensed health
 
12 care practitioner has certified that the individual meets the
 
13 requirements.
 
14      "Licensed health care practitioner" means any physician
 
15 licensed under chapter 453 or 460, nurse licensed under chapter
 
16 457, or social worker licensed under chapter 467E.
 
17      "Long-term care insurance policy" means any insurance
 
18 contract that meets the requirements of chapter 431:10A, part V,
 
19 and the only insurance protection provided under the contract is
 
20 the coverage of qualified long-term care services.  An insurance
 
21 contract shall not qualify as a long-term care insurance policy
 
22 unless the determination of whether an individual meets paragraph
 
23 (1) of the definition of chronically ill individual takes into
 

 
Page 4                                                     
                                     S.B. NO.           194
                                                        
                                                        

 
 1 account at least five of the activities of daily living.
 
 2      "Maintenance or personal care services" means any care the
 
 3 primary purpose of which is the provision of needed assistance
 
 4 with any of the disabilities as a result of which the individual
 
 5 is a chronically ill individual, including the protection from
 
 6 threats to health and safety due to severe cognitive impairment.
 
 7      "Qualified long-term care services" means necessary
 
 8 diagnostic, preventative, therapeutic, curing, treating,
 
 9 mitigating, and rehabilitative services, and maintenance or
 
10 personal care services that:
 
11      (1)  Are required by a chronically ill individual; and
 
12      (2)  Are provided under a plan of care prescribed by a
 
13           licensed health care practitioner."
 
14      SECTION 2.  New statutory material is underscored.
 
15      SECTION 3.  This Act shall take effect upon its approval;
 
16 shall apply to taxable years beginning after December 31, 1998.
 
17 
 
18                           INTRODUCED BY:  _______________________