SB567

Report Title:

Developmental Disabilities Endowment Trust Fund

Description:

Establishes a public-private endowment to finance long-term care for persons with developmental disabilities.

THE SENATE	S.B. NO.	567
TWENTY-THIRD LEGISLATURE, 2005
STATE OF HAWAII

A BILL FOR AN ACT

relating to services for persons with developmental disabilities.

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

SECTION 1. The legislature finds that individuals with developmental disabilities have needs that require the provision of a lifetime of services. In most situations, families are the main source of support for these individuals, in conjunction with any other available public resources. Although many families attempt to provide for such care, they often fail to secure the provision of long-term care for developmentally disabled family members, particularly once parents or caretakers are no longer available to provide for such care.

The purpose of this Act is to develop a program to assist families in conducting planning for the long-term care of family members through the creation of a state endowment trust fund for individuals with developmental disabilities.

SECTION 2. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"Chapter

Developmental Disabilities endowment trust fund

§ -1 Developmental disabilities endowment trust fund; established. (a) There is established in the State treasury the developmental disabilities endowment trust fund, which shall be administered by the director of finance. Moneys received from the state, county, or federal government, private contributions of cash and other property, and the income and capital gains earned by the fund shall constitute the trust fund assets.

(b) Expenditures from the fund shall be used only for the purposes of the developmental disabilities endowment established under this chapter. The developmental disabilities endowment board or the board’s designee shall be authorized to make expenditures from the fund.

(c) The developmental disabilities endowment board shall deposit in the fund all money received for the program, including state appropriations and private matching contributions. Notwithstanding any law to the contrary, income and investment return on endowment trust fund principal shall accrue to the trust fund with the exception of investment and operating costs associated with the investment of money by the director of finance. Disbursements from the fund are exempt from appropriations and the allotment provisions of chapter 37. However, money used for program administration is subject to the allotment and budgetary controls of chapter 37, and an appropriation is required for these expenditures.

§ -2 Developmental disabilities endowment board. (a) The developmental disabilities endowment board is established to design and administer the developmental disabilities endowment. The director of human services shall provide staff and administrative support to the board.

(b) The board shall consist of seven members as follows:

(1) Three of the members, who shall be appointed by the governor as provided in section 26-34, shall be persons who have demonstrated expertise and leadership in areas such as finance, actuarial science, management, business, or public policy;

(2) Three members of the board, who shall be appointed by the governor as provided in section 26-34, shall be persons who have demonstrated expertise and leadership in areas such as business, developmental disabilities service design, management, or public policy, and shall be family members of persons with developmental disabilities; and

(3) The seventh member of the board, who shall serve as chair of the board, shall be appointed by the remaining six members of the board.

(c) Members of the board shall serve terms of four years and may be appointed for successive terms of four years at the discretion of the appointing authority. However, the governor may stagger the terms of the initial six members of the board. (d) The members of the board shall serve without compensation, but shall be reimbursed for actual expenses, including traveling expenses, incurred in the performance of their duties.

(e) The board shall meet periodically as specified by the chair, or a majority of the board.

§ -3 Endowment principles. The design, implementation, and administration of the developmental disabilities endowment shall be governed by the following principles:

(1) The design and operation of the endowment should reward families who set aside resources for their child’s future care and provide incentives for continued caregiving by the family;

(2) The endowment should encourage financial planning and reward caregiving by a broad range of families, not just those who have substantial financial resources;

(3) Families that elect to participate in this endowment must meet the required private contribution but should not feel compelled to do so by contributing to the endowment in order to assure a basic level of continuing care for their child;

(4) All families should have equal access to developmental disabilities services not funded through the endowment regardless of whether they contribute to the endowment;

(5) Services funded through the endowment should be stable, ongoing, of reasonable quality, and respectful of individual and family preferences;

(6) Endowment resources should be expended economically in order to benefit as many families as possible;

(7) Endowment resources should be managed prudently so that families can be confident that their agreement with the endowment on behalf of their child will be honored;

(8) The private financial contribution on behalf of each person receiving services from the endowment shall be at least equal to the State’s contribution to the endowment;

(9) In order to be matched with funding from the State’s contribution to the endowment, the private contribution on behalf of a beneficiary must be sufficient to support the beneficiary’s approved service plan for a significant portion of the beneficiary’s anticipated remaining lifetime; and

(10) The rate that state appropriations to the endowment are used to match private contributions shall be such that each legislative appropriation to the developmental disabilities endowment trust fund, including principal and investment income, is not depleted in a period of less than five years.

§ -4 Investment of funds. (a) The board shall appoint investment managers for the management and investment of the developmentally disabilities endowment trust fund by contracting for professional investment management services with one or more organizations that are in the business of managing investments.

(b) In selecting and contracting for professional investment management services and in continuing the use of an investment manager, the board shall act prudently and in the interest of the beneficiaries of the endowment fund.

(c) In making and supervising investments of the endowment fund, an investment manager and the commission shall discharge their respective duties solely in the interest of the beneficiaries of the fund.

§ -5 Proposed operating plan. The developmental disabilities endowment board shall contract with an appropriate organization for the development of a proposed operating plan for the developmental disabilities endowment program. The proposed operating plan shall be consistent with the endowment principles specified in section -3. The plan shall address at least the following elements:

(1) The recommended types of services to be available through the endowment program and their projected average costs per beneficiary;

(2) An assessment of the number of people likely to apply for participation in the endowment under alternative rates of matching funds, minimum service year requirements, and contribution timing approaches;

(3) An actuarial analysis of the number of disabled beneficiaries who are likely to be supported under alternative levels of public contribution to the endowment, and the length of time the beneficiaries are likely to be served, under alternative rates of matching funds, minimum service year requirements, and contribution timing approaches;

(4) Recommended eligibility criteria for participation in the endowment program;

(5) Recommended policies regarding withdrawal of private contributions from the endowment in cases of movement out of state, death of the beneficiary, or other circumstances;

(6) Recommended matching rate of public and private contributions and, for each beneficiary, the maximum annual and lifetime amount of private contributions eligible for public matching funds;

(7) The recommended minimum years of service on behalf of a beneficiary that must be supported by private contributions in order for the contributions to qualify for public matching funds from the endowment;

(8) The recommended schedule according to which lump sum or periodic private contributions should be made to the endowment in order to qualify for public matching funds;

(9) A recommended program for educating families about the endowment, and about planning for their child’s long-term future; and

(10) Recommended criteria and procedure for selecting an organization or organizations to administer the developmental disabilities endowment program, and projected administrative costs.

§ -6 Program implementation and administration. (a) Based on the proposed operating plan under section -5, the developmental disabilities endowment board shall implement and administer, or contract for the administration of, the developmental disabilities endowment program under the principles specified in section -3. The board shall submit to the legislature the final program design, prior to implementation, at least twenty days prior to the convening of the regular session of 2006.

(b) The director of human services shall seek to maximize federal reimbursement and matching funds for expenditures made under the endowment program, and shall seek waivers from federal requirements as necessary for the receipt of federal funds.

(c) The board may receive gifts, grants, and endowments from public or private sources as may be made from time to time, in trust or otherwise, for the use and benefit of the purposes of the endowment program and may expend the gifts, grants, and endowments according to their terms."

SECTION 3. There is appropriated out of the general revenues of the State of Hawaii the sum of $1, or so much thereof as may be necessary for fiscal year 2005-2006, for the establishment of the developmental disabilities endowment trust fund.

The sum appropriated shall be expended by the department of human services for the purposes of this Act.

SECTION 4. This Act shall take effect on July 1, 2005.

INTRODUCED BY:	_____________________________