REPORT TITLE:
Long-Term Care Trust Fund


DESCRIPTION:
Creates a long-term care trust fund to assist with long-term care
premium costs of qualified individuals.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        3144
THE SENATE                              S.B. NO.           
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
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                   A  BILL  FOR  AN  ACT

RELATING TO LONG-TERM CARE.



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

 1      SECTION 1.  The Hawaii Revised Statutes is amended by adding
 
 2 a new chapter to be appropriately designated and to read as
 
 3 follows:
 
 4                             "CHAPTER
 
 5                     LONG-TERM CARE TRUST FUND
 
 6      §   -1  Definitions.  As used in this chapter, unless the
 
 7 context clearly requires otherwise:
 
 8      "Board" means the board of trustees of the long-term care
 
 9 trust fund.
 
10      "Fund" means the long-term care trust fund.
 
11      "Long-term care insurance premium" means payments made by a
 
12 qualified insured to purchase long-term care insurance coverage.
 
13      §   -2  Long-term care trust fund; establishment, purposes.
 
14 (a)  There is established in the state treasury, the long-term
 
15 care trust fund.  The fund shall be under the control of the
 
16 board under section    -3 and consist of appropriations,
 
17 contributions, interest, income, dividends, deposits from funds
 
18 collected under section 235-119, and other returns.  The director
 
19 of finance shall have custody of the fund.
 

 
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 1      (b)  The fund shall be used to pay        per cent of any
 
 2 long-term care insurance premium payments made by a taxpayer
 
 3 whose adjusted gross income is less than $         for the
 
 4 taxable year.
 
 5      §   -3  Board of trustees.  The board of trustees of the
 
 6 long-term care trust fund shall consist of           members, who
 
 7 shall be appointed by the governor as provided in section 26-34.
 
 8 All trustees shall be appointed for terms of four years, except
 
 9 that the terms of the trustees first appointed shall be two or
 
10 four years as designated by the governor at the time of
 
11 appointment.  The trustees shall elect a chairperson from among
 
12 their members.  The board and staff under section    -5 shall be
 
13 placed in the department of budget and finance for administrative
 
14 purposes only.
 
15      §   -4  Powers of the board.  Except as otherwise provided
 
16 by law, the board of trustees of the long-term care trust fund
 
17 may:
 
18      (1)  Sue and be sued;
 
19      (2)  Have a seal and alter the same at its pleasure;
 
20      (3)  Develop and implement a long-term care financing
 
21           strategy that will offer maximum benefits to Hawaii
 
22           residents;
 
23      (4)  Collect, receive, hold, and disburse all moneys payable
 

 
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 1           to or by the long-term care trust fund;
 
 2      (5)  Pay money from the fund to effectuate the fund's
 
 3           purpose, including costs incurred in establishing and
 
 4           administering the fund;
 
 5      (6)  Invest the fund's principal and income without
 
 6           distinction between principal and income and keep the
 
 7           fund's assets invested in real or personal property
 
 8           including securities;
 
 9      (7)  Manage the fund's assets, except to the extent that the
 
10           management of the assets is delegated to qualified
 
11           investment managers;
 
12      (8)  Appoint investment managers to manage, acquire, or
 
13           dispose of any of the fund's assets.  The investment
 
14           manager shall be registered as an investment advisor
 
15           under the Investment Advisers Act of 1940 (chapter 856,
 
16           54 Stat. 789), or a bank as defined in the Investment
 
17           Advisers Act of 1940 (chapter 856, 54 Stat. 789), or an
 
18           insurance company qualified to manage, acquire, or
 
19           dispose of any asset of similar plans under the laws of
 
20           more than one state, and shall acknowledge in writing
 
21           that it is a fiduciary of the system and shall be
 
22           liable for breaches of any applicable fiduciary
 
23           responsibility, obligation, or duty imposed by this
 

 
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 1           chapter;
 
 2      (9)  Develop and maintain a long-term care information data
 
 3           system to support and effectuate the purposes of this
 
 4           chapter; and
 
 5     (10)  Do all the things necessary and convenient to carry out
 
 6           the purposes of the fund.
 
 7      §   -5  Executive director; employees.(a)  The fund shall
 
 8 employ an executive director to be appointed by the board,
 
 9 without regard to chapters 76, 77, and 89.  The executive
 
10 director shall serve at the pleasure of the board, and shall act
 
11 as the chief executive officer of the fund and manage and conduct
 
12 the day-to-day business of the fund according to the directions
 
13 and policies of the board.
 
14      (b)  The fund may employ, without regard to chapters 76 and
 
15 77, and may at its pleasure dismiss such persons as it finds
 
16 necessary for the performance of its functions and fix their
 
17 compensation."
 
18      SECTION 2.  Chapter 235, Hawaii Revised Statutes, is amended
 
19 by adding a new section to be appropriately designated and to
 
20 read as follows:
 
21      "§235-     Long-term care tax credit.  (a)  There shall be
 
22 allowed to each taxpayer, subject to the taxes imposed by this
 
23 chapter, whose adjusted gross income is over $         a long-
 

 
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 1 term care tax credit which shall apply to the taxpayer's net
 
 2 income tax liability, if any, imposed by this chapter for the
 
 3 taxable year in which the credit is properly claimed.  The tax
 
 4 credit shall be an amount equal to         per cent of the cost
 
 5 of any long-term care insurance premium payments made by the
 
 6 taxpayer for the taxable year in which the payments were made.
 
 7      (b)  For the purpose of this credit, the "net income tax
 
 8 liability" means net income tax liability reduced by all other
 
 9 credits allowed under this chapter.
 
10      (c)  If the tax credit under this section exceeds the
 
11 taxpayer's income tax liability, the excess of the tax credit
 
12 over liability may be used as a credit against the taxpayer's
 
13 income tax liability in subsequent years until exhausted.  All
 
14 claims, including any amended claims, for tax credits under this
 
15 section shall be filed on or before the end of the twelfth month
 
16 following the close of the taxable year for which the credit may
 
17 be claimed.  Failure to comply with the foregoing provision shall
 
18 constitute a waiver of the right to claim the credit."
 
19      SECTION 3.  (a)  Section 235-119, Hawaii Revised Statutes,
 
20 to the contrary notwithstanding, on June 1, 2000, and June 1 of
 
21 each year thereafter, the director of taxation shall determine
 
22 the additional amount of revenue that would have been raised
 
23 through the collection of income taxes for the tax year ending on
 

 
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 1 the previous December 31 if the rate of tax applicable to each
 
 2 tax bracket under section 235-51, Hawaii Revised Statutes, had in
 
 3 fact been a specified rate that was higher than the rate actually
 
 4 in effect at the time.
 
 5      (b)  For purposes of subsection (a), the specified rate
 
 6 shall be an amount that represents one-half of the amount by
 
 7 which the rate for that tax bracket has been reduced because of
 
 8 Act 157, Session Laws of Hawaii 1998.
 
 9      (c)  The director of taxation shall certify the amount
 
10 calculated in subsection (a) to the director of finance, who
 
11 shall deposit a sum equal to that amount into the long-term care
 
12 trust fund established under chapter    , Hawaii Revised
 
13 Statutes.
 
14      SECTION 4.  New statutory material is underscored.
 
15      SECTION 5.  This Act shall take effect upon its approval.
 
16 
 
17                              INTRODUCED BY:______________________
 
18