REPORT TITLE:
Public Assistance


DESCRIPTION:
Removes the provisions regarding the annual update of the actual
amount of an agreement or lien recorded in the bureau of
conveyances.  Clarifies that there are two distinct liens for
which bureau of conveyances recording requirements apply and that
the department may initiate probate proceedings for both liens.
(HD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        2856
THE SENATE                              S.B. NO.           S.D. 1
TWENTIETH LEGISLATURE, 2000                                H.D. 1
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO PUBLIC ASSISTANCE.



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

 1      SECTION 1.  The legislature finds there is a need to clarify
 
 2 the law with respect to the requirement that the department of
 
 3 human services annually update the actual amount of the medical
 
 4 assistance liens recorded in the bureau of conveyances.
 
 5 Consequently, one of the purposes of this Act is to clarify that
 
 6 the update is an internal departmental accounting measure
 
 7 intended to track the expenditures by the department and not
 
 8 burden the bureau of conveyances by essentially recording the
 
 9 same lien against the same property year after year.  Filing the
 
10 same lien annually does not attach more interest in the real
 
11 property than claimed in the first recorded or filed lien and the
 
12 issue of an increase in the amount of the lien is already
 
13 addressed in section 346-29.5(c), Hawaii Revised Statutes.
 
14      The Act further clarifies that in addition to an agreement
 
15 that future grants of assistance constitute a real property lien,
 
16 there is a statutory provision for the placement of real property
 
17 liens.
 
18      In the enforcement of a lien as a claim under section
 
19 346-37, Hawaii Revised Statutes, against the estate of a
 

 
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 1 recipient, there are instances the department may need to
 
 2 initiate probate proceedings.  Therefore, the proposed amendment
 
 3 clarifies that the department may initiate probate proceedings.
 
 4      Finally, other technical and grammatical corrections have
 
 5 been made.
 
 6      SECTION 2.  Section 346-29.5, Hawaii Revised Statutes, is
 
 7 amended to read as follows:
 
 8      "§346-29.5  Real property liens.(a)  The department of
 
 9 human services may require of any person applying for or
 
10 currently receiving assistance under the department's programs,
 
11 including but not limited to social service payments, financial
 
12 assistance, medical assistance, and food stamps, who owns or has
 
13 any interest in real property, that the person shall enter into
 
14 an agreement with the department that future grants of assistance
 
15 shall be and constitute a lien against the interest in real
 
16 property, and shall remain a lien until satisfied and discharged,
 
17 with the exception of home property lived on by the assistance
 
18 household.
 
19      (b)  The department may also place a lien against the real
 
20 property of any recipient receiving medical assistance who is an
 
21 inpatient in a nursing facility, intermediate care facility for
 
22 the mentally retarded, or other medical institution, after a
 
23 state determination, pursuant to notice and hearing requirements
 

 
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 1 of chapter 91, that the recipient cannot reasonably be expected
 
 2 to be discharged from the medical institution and returned home.
 
 3 There is a rebuttable presumption that the recipient cannot
 
 4 reasonably be expected to be discharged from the facility and
 
 5 return home if the recipient or a representative of the recipient
 
 6 declares that there is no intent to return home or if the
 
 7 recipient has been institutionalized for six months or longer
 
 8 without a discharge plan.
 
 9      (1)  The department may not place a lien on the recipient's
 
10           home if the recipient's:
 
11           (A)  Spouse;
 
12           (B)  Minor, blind, or disabled child; or
 
13           (C)  Sibling who has an equity interest in the home and
 
14                who was residing in the home for a period of at
 
15                least one year immediately before the date of the
 
16                recipient's admission to the medical institution;
 
17           is lawfully residing in the home.
 
18      (2)  The department shall not recover funds from the lien on
 
19           the recipient's home when:
 
20           (A)  A sibling who was residing in the home for a
 
21                period of at least one year immediately before the
 
22                date of the recipient's admission to the medical
 
23                institution; or
 

 
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 1           (B)  A son or daughter who was residing in the
 
 2                recipient's home for a period of at least two
 
 3                years immediately before the date of the
 
 4                recipient's admission to the medical institution,
 
 5                and who establishes to the satisfaction of the
 
 6                State that he or she provided care to the
 
 7                recipient which permitted such recipient to reside
 
 8                at home rather than in an institution; 
 
 9           lawfully resides in the home and has lawfully resided
 
10           in the home on a continuous basis since the date of the
 
11           recipient's admission to the medical institution.
 
12      (3)  The department also shall not recover funds from the
 
13           lien if the recipient has a surviving spouse; or
 
14           surviving minor, blind, or disabled child.
 
15      (4)  Any lien imposed with respect to this subsection shall
 
16           be dissolved upon the individual's discharge from the
 
17           medical institution and return home.
 
18      (c)  The agreement in subsection (a) or the lien in
 
19 subsection (b) shall be recorded in the bureau of conveyances, or
 
20 filed in the office of the assistant registrar of the land court.
 
21 When the agreement [for the] or lien is recorded in the bureau of
 
22 conveyances, the registrar shall forthwith cause the same to be
 
23 indexed in the general indexes of the bureau of conveyances.
 

 
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 1 From and after the recording in the bureau of conveyances the
 
 2 [lien] liens shall attach to all interests in real property then
 
 3 owned by the person and not registered in the land court, and
 
 4 from and after the filing thereof in the office of the assistant
 
 5 registrar of the land court the [lien] liens shall attach to any
 
 6 such interest in land then registered therein.  The [lien] liens
 
 7 shall be for all amounts of assistance, unless otherwise provided
 
 8 by rules adopted pursuant to chapter 91, then or thereafter paid
 
 9 in accordance with the programs from which the person receives
 
10 assistance.  The department shall be obligated to annually
 
11 update, as an accounting measure, the actual amount of the [lien]
 
12 liens recorded in the bureau of conveyances.
 
13       (d)  The department shall issue certificates of release or
 
14 partial release upon satisfaction or partial satisfaction of the
 
15 [lien] liens.  Certificates of release or partial release of any
 
16 real property lien issued by the director [of the department] or
 
17 the director's authorized representative shall be recorded in the
 
18 bureau of conveyances.  The director shall consider issuing
 
19 conditional certificates of release in cases of extreme hardship
 
20 as set out in rules adopted under chapter 91.  The registrar
 
21 shall forthwith cause the same to be indexed in the general
 
22 indexes in a like manner as the original [lien] liens.  No fee
 
23 shall be charged for any of the recording.  The [lien] liens
 
24 herein provided for shall take priority over any other lien
 
25 subsequently acquired or recorded except tax liens and except
 

 
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 1 that, in the estate of a beneficiary, the actual funeral
 
 2 expenses, the expenses of the last sickness, the cost of
 
 3 administration of the estate, and any allowance made to the
 
 4 surviving spouse and children for their support during
 
 5 administration of the estate, shall have priority and preference
 
 6 over the [lien] liens herein imposed, and over any claim against
 
 7 an estate filed under section 346-37.
 
 8      The [lien] liens shall be enforceable by the department by
 
 9 suit in the appropriate court or shall be enforceable as a claim
 
10 against the estate of the recipient under section 346-37, having
 
11 priority over all other debts except taxes, the actual funeral
 
12 expenses, the expenses of last sickness, the cost of
 
13 administration of the estate, and any allowance made to the
 
14 surviving spouse and children for their support during
 
15 administration of the estate.
 
16      The [lien] liens shall be enforceable as a claim under
 
17 section 346-37 against the estate of a recipient under any
 
18 circumstances if the estate is admitted to probate at the
 
19 instance of any interested party [other than the department].
 
20      Whenever the department is satisfied that the collection of
 
21 the amount of assistance paid a recipient will not be jeopardized
 

 
 
 
 
 
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 1 or that the release or waiver of the priority of the [lien] liens
 
 2 against the recipient's property, in whole or in part, is
 
 3 necessary to provide for the maintenance or support of the
 
 4 recipient, the recipient's spouse, or any minor or incapacitated
 
 5 child, it may release or waive the priority of the [lien] liens
 
 6 with respect to all or any part of the real property.
 
 7      The recipient, the recipient's heirs, personal
 
 8 representatives, or assigns may discharge the [lien] liens at any
 
 9 time by paying the amount thereof to the department which shall
 
10 execute a satisfaction thereof.  The department may at its
 
11 discretion compromise the collection of any such [lien] liens,
 
12 but such compromise shall be made only when the recipient, the
 
13 recipient's heirs, personal representatives, or assigns prove
 
14 that the collection of the full amount of the [lien] liens or
 
15 claim would cause undue hardship or the [lien] liens or claim
 
16 [is] are otherwise uncollectible.
 
17      The proceeds from the enforcement, payment, or compromise of
 
18 the [lien] liens shall be paid into the treasury of the State.
 
19 If the amount of assistance reflected by the proceeds was paid in
 
20 part by federal funds, the proper portion of these funds shall be
 
21 paid by the director of finance to the treasury of the United
 
22 States.  The director of finance shall thereupon report such
 
23 payment to the department.  If the federal funds are not paid
 
24 directly into the treasury of the United State, these federal
 

 
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 1 funds shall be credited by the director of finance to the
 
 2 department for expenditure for assistance without need for
 
 3 further appropriation.
 
 4      If at any time the federal government, or any agency or
 
 5 instrumentality thereof, requires, as a condition to any grant of
 
 6 assistance, the performance of conditions inconsistent with this
 
 7 section, or desisting from actions provided by this section, the
 
 8 governor may suspend, upon a finding to that effect and to the
 
 9 extent of such requirement, any provisions of this section to the
 
10 end that such federal assistance may be received.
 
11      The department shall submit an annual report to the
 
12 legislature, which shall include a list of liens held by the
 
13 department on real property.  This report shall include, but not
 
14 be limited to a description of the value of the liens, the legal
 
15 status of the liens and when the liens were initiated.
 
16      The department shall adopt rules pursuant to chapter 91
 
17 necessary for the purposes of this section."
 
18      SECTION 3.  Statutory material to be repealed is bracketed.
 
19 New statutory material is underscored.
 
20      SECTION 4.  This Act shall take effect upon its approval.