HB813

SECTION 1. The Social Security Administration currently requires $30 of monthly benefits be set aside for social security recipients who reside in certain institutional care settings. The $30 is used for the individual's needs. The personal needs allowance is intended to pay for clothing, toiletries, bus fare, personal postage costs, snacks, and other incidental expenses of day-to-day living.

In 1974, the federal government established the minimum needs allowance for a nursing home resident to be $25, which was raised in 1988 to $30 which still is in effect today. In 2004, only eleven states remained at $30, the other states having since raised their minimum allowance. If the needs allowance was pegged to the Consumer Price Index with 1974 as a baseline, the equivalent buying power of $25 then would be $115.19 in 2004.

Raising the needs allowance may require the use general funds. However, the legislature finds that it is unconscionable to fail to raise the $30 to allow residents of long-term care facilities and community care home residents to enjoy a minimally acceptable daily quality of life.

The purpose of this Act is to establish a needs allowance for persons residing in community care homes and other long-term care facilities.

SECTION 2. Chapter 346D, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§346D- Needs allowance; waiver program individuals. (a) There is created a monthly needs allowance for individuals living in adult residential care home type I and type II facilities, licensed developmental disabilities domiciliary homes as defined under section 321-15.9, community care foster family homes as defined under section 346-331, certified adult foster homes as defined under section 321-11.2,domiciliary care as defined in section 346-1, nursing facility as defined in section 346E-1, or community-based residence as part of the residential alternatives community care program. The needs allowance shall be administered by the department of human services to pay for clothing and other personal miscellaneous needs such as bus fare, personal postage costs, haircuts, and other costs of day‑to‑day living.

(b) The State's supplemental payment for needs allowance under subsection (a) shall be increased by an amount necessary to bring the allowance up to $50 per month, to be increased annually in an amount equal the Social Security Income benefit increase. The payment under this subsection shall be afforded to an individual notwithstanding that the individual is incapacitated; provided that the moneys may be spent on behalf of the client with a written accounting.

(c) The needs allowance payment is not intended to replace or affect the funds received from the federal supplemental security income program, and shall be supplemental to any funds provided to a recipient by the federal supplemental security income program.

(d) The operator shall pay for generic toiletries (toilet paper, hand soap, paper towers), use of linens (bedding, sheet, blanket, towels, bath rug), and meals and snacks for outings (prorated to be equal to the cost of the meal and snack or the cost of laundry services and supplies).

(e) The needs allowance shall apply to persons otherwise eligible to receive monthly income pursuant to state law or rules, and federal laws or regulations, and is not intended to affect the classifications or number of persons eligible to receive such funds."

SECTION 3. Section 235-7, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) There shall be excluded from gross income, adjusted gross income, and taxable income:

(1) Income not subject to taxation by the State under the Constitution and laws of the United States;

(2) Rights, benefits, and other income exempted from taxation by section 88-91, having to do with the state retirement system, and the rights, benefits, and other income, comparable to the rights, benefits, and other income exempted by section 88-91, under any other public retirement system;

(3) Any compensation received in the form of a pension for past services;

(4) Compensation paid to a patient affected with Hansen's disease employed by the State or the United States in any hospital, settlement, or place for the treatment of Hansen's disease;

(5) Except as otherwise expressly provided, payments made by the United States or this State, under an act of Congress or a law of this State, which by express provision or administrative regulation or interpretation are exempt from both the normal and surtaxes of the United States, even though not so exempted by the Internal Revenue Code itself;

(6) Any income expressly exempted or excluded from the measure of the tax imposed by this chapter by any other law of the State, it being the intent of this chapter not to repeal or supersede any such express exemption or exclusion;

(7) Income received by each member of the reserve components of the Army, Navy, Air Force, Marine Corps, or Coast Guard of the United States of America, and the Hawaii national guard as compensation for performance of duty, equivalent to pay received for forty-eight drills (equivalent of twelve weekends) and fifteen days of annual duty, at an:

(A) E-1 pay grade after eight years of service; provided that this subparagraph shall apply to taxable years beginning after December 31, 2004;

(B) E-2 pay grade after eight years of service; provided that this subparagraph shall apply to taxable years beginning after December 31, 2005;

(C) E-3 pay grade after eight years of service; provided that this subparagraph shall apply to taxable years beginning after December 31, 2006;

(D) E-4 pay grade after eight years of service; provided that this subparagraph shall apply to taxable years beginning after December 31, 2007; and

(E) E-5 pay grade after eight years of service; provided that this subparagraph shall apply to taxable years beginning after December 31, 2008;

(8) Income derived from the operation of ships or aircraft if the income is exempt under the Internal Revenue Code pursuant to the provisions of an income tax treaty or agreement entered into by and between the United States and a foreign country, provided that the tax laws of the local governments of that country reciprocally exempt from the application of all of their net income taxes, the income derived from the operation of ships or aircraft that are documented or registered under the laws of the United States;

(9) The value of legal services provided by a prepaid legal service plan to a taxpayer, the taxpayer's spouse, and the taxpayer's dependents;

(10) Amounts paid, directly or indirectly, by a prepaid legal service plan to a taxpayer as payment or reimbursement for the provision of legal services to the taxpayer, the taxpayer's spouse, and the taxpayer's dependents;

(11) Contributions by an employer to a prepaid legal service plan for compensation (through insurance or otherwise) to the employer's employees for the costs of legal services incurred by the employer's employees, their spouses, and their dependents; [~~and~~]

(12) Amounts received in the form of a monthly surcharge by a utility acting on behalf of an affected utility under section 269-16.3 shall not be gross income, adjusted gross income, or taxable income for the acting utility under this chapter. Any amounts retained by the acting utility for collection or other costs shall not be included in this exemption[.]; and

(13) Amounts received in the form of a monthly needs allowance under section 346D- , received:

(A) Indirectly by a facility operator on behalf of an individual resident of a qualified facility; or

(B) Directly by an individual resident of a qualified facility."

(14) Amounts received in the form of a monthly needs allowance received indirectly by a facility operator on behalf of an individual resident of a qualified facility, as provided in section 346D- ."

SECTION 4. Section 237-24.75, Hawaii Revised Statutes, is amended to read as follows:

"[[]§237-24.75[]] Additional exemptions. In addition to the amounts exempt under section 237-24, this chapter shall not apply to amounts received [as]:

(1) As a beverage container deposit collected under chapter 342G, part VIII[.]; and

(2) In the form of a monthly needs allowance received indirectly by a facility operator on behalf of an individual resident of a qualified facility, as provided in section 346D- ."

SECTION 5. There is appropriated out of the general revenues of the State of Hawaii the sum of $ , or so much thereof as may be necessary for fiscal year 2007‑2008, to provide a monthly needs allowance for individuals living in adult residential care home type I and type II facilities, licensed developmental disabilities domiciliary homes as defined under section 321-15.9, Hawaii Revised Statutes, community care foster family homes as defined under section 346-331, Hawaii Revised Statutes, certified adult foster homes as defined under section 321-11.2, Hawaii Revised Statutes, domiciliary care as defined in section 346-1, Hawaii Revised Statutes, nursing facility as defined in section 346E-1, Hawaii Revised Statutes, or community-based residence as part of the residential alternatives community care program, as provided in section 2 of this Act.

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

SECTION 6. New statutory material is underscored.

SECTION 7. This Act shall take effect on July 1, 2007; provided that amendments to section 235-7(a), Hawaii Revised

Statutes, shall apply to taxable years beginning after December 31, 2006.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	813
TWENTY-FOURTH LEGISLATURE, 2007
STATE OF HAWAII


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