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90_HB0504eng New Act 20 ILCS 1405/56.5 new 20 ILCS 2205/48c new 30 ILCS 330/2 from Ch. 127, par. 652 Creates the Elder Care Savings Bond Act that authorizes the issuance and sale of up to $300,000,000 of General Obligation Elder Care Savings Bonds for purchase by Illinois residents to enhance their financial access to long term health care. Amends the General Obligation Bond Act to reflect this bond authorization. Amends the Civil Administrative Code to direct the Department of Public Aid, in cooperation with the Department of Insurance, to undertake a study to determine the feasibility of health maintenance organizations providing acute care to the State's Medicaid long term care recipients. Effective immediately. LRB9002463PTcw HB0504 Engrossed LRB9002463PTcw 1 AN ACT concerning long term health care. 2 Be it enacted by the People of the State of Illinois, 3 represented in the General Assembly: 4 Section 1. Short title. This Act may be cited as the 5 Elder Care Savings Bond Act. 6 Section 5. Declaration of purpose. It is declared (i) 7 that for the benefit of the people of the State of Illinois, 8 the conduct and increase of their commerce, the protection 9 and enhancement of their welfare, the development of 10 continued prosperity, and the improvement of their health and 11 living conditions, it is essential that this and future 12 generations be given the fullest opportunity to provide for 13 their long term health care needs and (ii) that to achieve 14 these ends it is of the utmost importance that Illinois 15 residents be provided with investment alternatives to enhance 16 their financial access to long term health care. It is the 17 intent of this Act to provide to the State of Illinois an 18 alternative low cost method of borrowing for the purposes 19 authorized in the General Obligation Bond Act and to enhance 20 financial access to long term health care, all in execution 21 of the public policy set forth in this Section. 22 Section 10. Definitions. In this Act: 23 (a)(1) "Assisted living establishment" or 24 "establishment" means a home, building, residence, or any 25 other place where the services described below are provided: 26 (A) community-based residential care, including 27 housing and personal and health-related services, to 28 persons who need help with activities of daily living; 29 (B) supportive and intermittent health-related 30 services that are available 24 hours per day, if needed, HB0504 Engrossed -2- LRB9002463PTcw 1 to meet scheduled and unscheduled needs of a tenant, in a 2 way that promotes self-direction and participation in 3 decisions that emphasize independence, individuality, 4 privacy, and dignity in a residential surrounding; 5 (C) sleeping accommodations for 3 or more unrelated 6 adult tenants, at least 80 percent of which are 55 years 7 of age or older; and 8 (D) all Group 1 services and one or more Group 2 9 services, whether provided directly by the establishment 10 or by another entity arranged for by the establishment 11 with the consent of the tenant or tenant's 12 representative. 13 An "assisted living establishment" or 14 "establishment" also means a home, building, residence, 15 or any other place that provides the services of items 16 (A) through (D) of this paragraph, and, in addition, any 17 Group 3 services. 18 (2) "Assisted living establishment" or "establishment" 19 does not mean: 20 (A) a home, institution, or similar place operated 21 by the federal government or the State of Illinois; 22 (B) a "long term care facility" licensed under the 23 Nursing Home Care Act. However, a long term care facility 24 may apply under this Act to convert sections of the 25 facility to assisted living. If the long term care 26 facility elects to do so, the facility retains the 27 Certificate of Need for its nursing beds that were 28 converted; 29 (C) a hospital, sanitarium, or other institution, 30 the principal activity or business of which is the 31 diagnosis, care, and treatment of human illness and that 32 is required to be licensed under the Hospital Licensing 33 Act; 34 (D) a "facility for child care" as defined in the HB0504 Engrossed -3- LRB9002463PTcw 1 Child Care Act of 1969; 2 (E) a "community living facility" as defined in the 3 Community Living Facilities Licensing Act; 4 (F) a "community residential alternative" as 5 defined in the Community Residential Alternatives 6 Licensing Act; 7 (G) a nursing home or sanitarium operated solely by 8 and for persons who rely exclusively upon treatment by 9 spiritual means through prayer, in accordance with the 10 creed or tenants of a well-recognized church or religious 11 denomination; 12 (H) a facility licensed by the Department of Human 13 Services as a "community-integrated living arrangement" 14 as defined in the Community-Integrated Living 15 Arrangements Licensure and Certification Act; 16 (I) a "supportive residence" licensed under the 17 Supportive Residences Licensing Act; 18 (J) a "life care facility" as defined in the Life 19 Care Facilities Act; and 20 (K) a freestanding hospice facility. 21 (3) For the purposes of this subsection, "Group 1 22 services" include the following: 23 (A) meals provided in a dining room or the 24 tenant's own room and prepared by the establishment or 25 an outside contractor; 26 (B) housekeeping services, including but not 27 limited to vacuuming, dusting, and cleaning the kitchen 28 and bathrooms of the tenant's unit; 29 (C) security provided 24 hours each day, including 30 but not limited to locked entrances or building or 31 contract security personnel; 32 (D) an emergency communication response system, 33 which is a procedure in place 24 hours each day by which 34 a tenant can notify building management, an emergency HB0504 Engrossed -4- LRB9002463PTcw 1 response vendor, or others able to respond to his or her 2 need for assistance. 3 (4) For the purposes of this subsection, "Group 2 4 services" include the following: 5 (A) personal care, including one or more of the 6 following: assistance with bathing, dressing, grooming, 7 ambulating, toileting, transferring, meal planning, and 8 personal laundry; 9 (B) medication management, including one or more of 10 the following: reminders to take medication, monitoring 11 of tenant medications, storage of medications, and 12 assisting tenants with medications set up by a family 13 member or nurse; 14 (C) intermittent health services, including one or 15 more of the following: medication administration, 16 dressing changes, catheter care, therapies, and other 17 medical, nursing, or rehabilitative care provided by 18 personnel licensed under the Home Health Agency Licensing 19 Act and by the Department of Professional Regulation. 20 (5) For the purposes of this subsection, "Group 3 21 services" include the following: 22 (A) transportation, including but not limited to 23 car or van service for shopping and medical appointments; 24 (B) a health assessment, which is a health history, 25 physical examination, risk profile, or screening by 26 licensed health care personnel; 27 (C) counseling for health, social services, and 28 nutrition by licensed personnel; 29 (D) social or educational activities, including but 30 not limited to trips, classes, lectures, and parties in 31 or outside the establishment. 32 (6) For the purposes of this subsection, "tenant" means 33 a person residing in an assisted living establishment. 34 (b) "Authority" means the Elder Care Trust Authority. HB0504 Engrossed -5- LRB9002463PTcw 1 (c) "Elder Care Savings Bonds" means general obligation 2 bonds of the State issued under the General Obligation Bond 3 Act in accordance with this Act and designated as General 4 Obligation Elder Care Savings Bonds. 5 Section 15. Issuance and sale of bonds. 6 (a) In order to provide investors with investment 7 alternatives to enhance their financial access to long term 8 health care, and in furtherance of the public policy of this 9 Act, bonds authorized by the provisions of the General 10 Obligation Bond Act, in a total aggregate original principal 11 amount not to exceed $300,000,000 may be issued and sold in 12 fiscal year 1998 and the following fiscal years, from time to 13 time, and as often as practicable, as Elder Care Savings 14 Bonds in amounts directed by the Governor, upon 15 recommendation by the Director of the Bureau of the Budget. 16 Bonds to be issued and sold as Elder Care Savings Bonds shall 17 be designated by the Governor and the Director of the Bureau 18 of the Budget as "General Obligation Elder Care Savings 19 Bonds" in the proceedings authorizing the issuance of those 20 bonds and shall be subject to all of the terms and provisions 21 of the General Obligation Bond Act, except that Elder Care 22 Savings Bonds may bear interest payable at a time or times 23 and may be sold at prices and in a manner as determined by 24 the Governor and the Director of the Bureau of the Budget and 25 except as otherwise provided in this Act. 26 (b) If Elder Care Savings Bonds are sold at public sale, 27 the public sale procedures shall be as set forth in Section 28 11 of the General Obligation Bond Act. Elder Care Savings 29 Bonds may be sold at negotiated sale if the Director of the 30 Bureau of the Budget determines that a negotiated sale will 31 result in either a more efficient and economic sale of the 32 bonds or greater access to the bonds by investors who are 33 residents of the State of Illinois. If any Elder Care HB0504 Engrossed -6- LRB9002463PTcw 1 Savings Bonds are sold at a negotiated sale, the underwriter 2 or underwriters to which the bonds are sold shall (i) be 3 organized, incorporated, or have their principal place of 4 business in the State of Illinois or (ii) in the judgment of 5 the Director of the Bureau of the Budget, have sufficient 6 capability to make a broad distribution of the bonds to 7 investors who reside in the State of Illinois. 8 (c) In determining the aggregate principal amount of 9 Elder Care Savings Bonds that has been issued pursuant to 10 this Act, the aggregate original principal amount of those 11 bonds issued and sold shall be taken into account. 12 (d) Any bond issued under this Act shall be payable in 13 one payment on a fixed date, unless the Governor and the 14 Director of the Bureau of the Budget determine otherwise. 15 Section 20. Security of bonds. 16 (a) Any Elder Care Savings Bonds issued under the 17 General Obligation Bond Act in accordance with this Act shall 18 be direct, general obligations of the State of Illinois and 19 subject to repayment as provided in the General Obligation 20 Bond Act. In the proceedings of the Governor and the 21 Director of the Bureau of the Budget authorizing the issuance 22 of Elder Care Savings Bonds, however, those officials may 23 covenant on behalf of the State with or for the benefit of 24 the holders of those bonds as to all matters deemed advisable 25 by those officials, including the terms and conditions for 26 creating and maintaining sinking funds, reserve funds, and 27 other special funds created in those proceedings separate and 28 apart from all other funds and accounts of the State. Those 29 officials may make other covenants deemed necessary or 30 desirable to assure the prompt payment of the principal of 31 and interest on the bonds. 32 (b) The transfers to and appropriations from the General 33 Obligation Bond Retirement and Interest Fund required by the HB0504 Engrossed -7- LRB9002463PTcw 1 General Obligation Bond Act shall be made at times and in 2 amounts as determined by the Governor and the Director of the 3 Bureau of the Budget and shall be made to and from any fund 4 or funds created pursuant to this Section for the payment of 5 the principal of and interest on any Elder Care Savings 6 Bonds. 7 Section 25. Compelling payment; remedies of bondholders. 8 (a) If the State fails to pay the principal of or 9 interest on any Elder Care Savings Bonds or premium, if any, 10 as those amounts become due, or fails to make any required 11 monthly transfer of moneys to provide for the payment of the 12 principal, interest, or premium on the bonds, a civil action 13 to compel payment may be instituted in the Supreme Court of 14 Illinois as a court of original jurisdiction by the holder or 15 holders of the Elder Care Savings Bonds with respect to which 16 the default of payment or failure to make a required transfer 17 exists. Delivery of a summons and a copy of the complaint to 18 the Attorney General constitutes sufficient service to give 19 the Supreme Court of Illinois jurisdiction of the subject 20 matter of the suit and jurisdiction over the State and its 21 officers named as defendants for the purpose of compelling 22 the payment or transfer. Any case, controversy, or cause of 23 action concerning the validity of this Act relates to the 24 revenue of the State of Illinois. 25 (b) If the Supreme Court of Illinois denies the holder 26 or holders of bonds leave to file an original action in the 27 Supreme Court, the bond holder or holders may bring the 28 action in the Circuit Court of Sangamon County. 29 Section 30. Exemption from taxation. As provided in 30 this Act, the issuance of Elder Care Savings Bonds is in all 31 respects for the benefit of the People of the State of 32 Illinois, the conduct and increase of their commerce, the HB0504 Engrossed -8- LRB9002463PTcw 1 protection and enhancement of their welfare, the development 2 of continued prosperity, and the improvement of their health 3 and living conditions, and the issuance of those bonds is for 4 public purposes. In consideration of those facts, Elder Care 5 Savings Bonds issued under the General Obligation Bond Act in 6 accordance with this Act and the income derived from those 7 bonds shall be free from all taxation by the State or its 8 political subdivisions, except for estate, transfer, and 9 inheritance taxes. 10 Section 35. Grant program. 11 (a) The proceedings of the Governor and the Director of 12 the Bureau of the Budget authorizing the issuance of Elder 13 Care Savings Bonds shall also provide for a grant program of 14 additional financial incentives to be provided to holders of 15 those bonds to encourage the use of the bonds and the income 16 derived from the bonds for one or more of the following 17 purposes: 18 (1) Care in a facility licensed under the Nursing 19 Home Care Act. 20 (2) Home health nursing services or home health 21 aide services provided by a home health agency licensed 22 under the Home Health Agency Licensing Act. 23 (3) Respite care as defined in the Respite Program 24 Act. 25 (4) Custodial care services. 26 (5) Care in a hospice licensed under the Hospice 27 Program Licensing Act. 28 (6) Long term health care services for the aged, 29 the disabled, or persons diagnosed as infected with HIV 30 or having AIDS or a related condition. These services 31 include, without limitation, chore-housekeeping services, 32 a personal care attendant, adult day care, assistive 33 equipment, home renovation, home-delivered meals, and HB0504 Engrossed -9- LRB9002463PTcw 1 emergency response systems. As used in this paragraph, 2 "AIDS" means acquired immunodeficiency syndrome; "HIV" 3 means the Human Immunodeficiency Virus or any other 4 identified causative agent of AIDS. 5 (7) Care in an assisted living establishment. 6 (b) The grant program of financial incentives shall be 7 administered by the State Treasurer pursuant to 8 administrative rules adopted by the Treasurer. The financial 9 incentives shall be in forms determined by the Governor and 10 the Director of the Bureau of the Budget at the time of the 11 authorization of the Elder Care Savings Bonds and may 12 include, among others, supplemental payments to the holders 13 of the bonds at maturity to be applied to costs of care or 14 services specified in items (1) through (6) of subsection 15 (a). The Treasurer may establish, by rule, administrative 16 procedures and eligibility criteria for the grant program; 17 those rules must be consistent with the purposes of this Act. 18 The Treasurer may require bond holders, providers of long 19 term health care services, and other necessary parties to 20 assist in the determination of eligibility for financial 21 incentives under the grant program. 22 (c) All grants shall be subject to annual appropriation 23 of moneys for that purpose by the General Assembly. 24 Financial incentives shall be provided only if, in the sole 25 judgment of the Director of the Bureau of the Budget, the 26 cost of the incentives will not cause the cost to the State 27 of the proceeds of the Elder Care Savings Bonds being sold to 28 be increased by more than 0.5%. 29 Section 40. Education program. The State Treasurer shall 30 develop and implement an education program and marketing 31 strategies designed to inform residents of this State about 32 the options available for financing long term health care and 33 the need to accumulate the financial resources necessary to HB0504 Engrossed -10- LRB9002463PTcw 1 pay for that care. The Treasurer shall report to the General 2 Assembly on the program developed and its operation before 3 May 1, 1998. The Treasurer shall adopt rules with respect to 4 his or her powers and duties under this Act. 5 Section 45. Elder Care Trust Authority. 6 (a) There is created the Elder Care Trust Authority. 7 The Authority shall consist of 11 members, 7 of whom shall be 8 appointed as follows: the Speaker and Minority Leader of the 9 House of Representatives and the President and Minority 10 Leader of the Senate shall each appoint one member, and the 11 Governor shall appoint 3 members. The State Treasurer, the 12 Director of the Bureau of the Budget, the Director of Public 13 Health, and the Director of the Illinois Economic and Fiscal 14 Commission, or their respective designees, shall each be a 15 member ex officio. The Governor and legislative leaders 16 shall give consideration to selecting members that include 17 representatives from the following categories: (i) a 18 director, officer, or employee of an entity that provides 19 long term health care services; (ii) a person having a 20 favorable reputation for skill, knowledge, and experience in 21 the field of state and municipal finance, either as a 22 partner, officer, or employee of an investment banking firm 23 that originates and purchases state and municipal securities 24 or as an officer or employee of an insurance company or bank 25 whose duties relate to the purchase of state and municipal 26 securities as an investment and to the management and control 27 of a state and municipal securities portfolio; and (iii) a 28 person experienced in and having a favorable reputation for 29 skill, knowledge, and experience in the long term health care 30 loan finance field. 31 The State Treasurer or the Treasurer's designee shall 32 serve as the chairperson of the Authority. 33 The appointed members of the Authority first appointed HB0504 Engrossed -11- LRB9002463PTcw 1 shall serve for terms expiring on June 30 in 1999, 2000, 2 2001, 2002, 2003, 2004, and 2005 respectively, or until their 3 respective successors have been appointed and have qualified. 4 The initial term of each of those members shall be determined 5 by lot. Upon the expiration of the term of any member, the 6 member's successor shall be appointed for a term of 6 years 7 and until his or her successor has been appointed and has 8 qualified. 9 Any vacancy shall be filled in the manner of the original 10 appointment for the remainder of the unexpired term. 11 Any member of the Authority may be removed by the 12 appointing authority for misfeasance, malfeasance, or wilful 13 neglect of duty or other cause after notice and a public 14 hearing, unless that notice and hearing are expressly waived 15 by the member in writing. 16 Members shall be compensated from moneys appropriated to 17 the State Treasurer for their reasonable expenses actually 18 incurred in performing their duties. 19 Staff assistance shall be provided to the Authority by 20 the State Treasurer. 21 The Authority shall meet at least once each year. 22 (b) The Authority has the following responsibilities: 23 (1) To make recommendations to the Bureau of the 24 Budget regarding the marketing of Elder Care Savings 25 Bonds to ensure their broad distribution throughout the 26 State for long term health care purposes. 27 (2) To advise the Bureau of the Budget on an 28 effective advertising campaign to inform the general 29 public about Elder Care Savings Bonds and their 30 availability. 31 (3) To advise the Governor and the Director of the 32 Bureau of the Budget regarding the increments in which to 33 market the bonds, and to recommend maturity dates that 34 will make moneys available to purchasers at the time when HB0504 Engrossed -12- LRB9002463PTcw 1 the moneys are needed for long term health care purposes. 2 (4) To advise the Bureau of the Budget on limits 3 that may be imposed on the amount of Elder Care Savings 4 Bonds that may be purchased by individual households. 5 (5) To advise the Bureau of the Budget on the 6 minimum denominations in which to market the Elder Care 7 Savings Bonds so that they are affordable by individuals. 8 (6) To evaluate the feasibility of staggered or 9 periodic forms of payments for Elder Care Savings Bonds, 10 and to advise the Bureau of the Budget regarding that 11 evaluation. 12 (7) After the initial sale of Elder Care Savings 13 Bonds, to assess the effectiveness of the program and 14 recommend constructive changes to the Bureau of the 15 Budget regarding future bond sales. 16 (8) To study and review alternative investment 17 instruments with respect to their suitability for a long 18 term health care savings program. 19 (9) To make recommendations to the General Assembly 20 regarding statutory changes that the Authority deems 21 necessary or desirable. 22 Section 115. The General Obligation Bond Act is amended 23 by changing Section 2 as follows: 24 (30 ILCS 330/2) (from Ch. 127, par. 652) 25 Sec. 2. Authorization for Bonds. The State of Illinois 26 is authorized to issue, sell and provide for the retirement 27 of General Obligation Bonds of the State of Illinois in the 28 total amount of $8,805,508,392 herein called "Bonds". 29 Of the total amount of bonds authorized above, up to 30 $2,200,000,000 in aggregate original principal amount may be 31 issued and sold in accordance with the Baccalaureate Savings 32 Act in the form of General Obligation College Savings Bonds. HB0504 Engrossed -13- LRB9002463PTcw 1 Of the total amount of bonds authorized above, up to 2 $300,000,000 in aggregate original principal amount may be 3 issued and sold in accordance with the Retirement Savings Act 4 in the form of General Obligation Retirement Savings Bonds. 5 Of the total amount of bonds authorized above, up to 6 $300,000,000 in aggregate original principal amount may be 7 issued and sold in accordance with the Elder Care Savings 8 Bond Act in the form of General Obligation Elder Care Savings 9 Bonds. 10 The issuance and sale of Bonds pursuant to the General 11 Obligation Bond Act is an economical and efficient method of 12 financing the capital needs of the State. This Act will 13 permit the issuance of a multi-purpose General Obligation 14 Bond with uniform terms and features. This will not only 15 lower the cost of registration but also reduce the overall 16 cost of issuing debt by improving the marketability of 17 Illinois General Obligation Bonds. 18 Bonds shall be issued for the categories and specific 19 purposes expressed in Sections 2 through 8 and Section 16 of 20 this Act. 21 (Source: P.A. 90-1, eff. 2-20-97.) 22 Section 999. Effective date. This Act takes effect upon 23 becoming law.
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