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90_HB0504
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
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 "Authority" means the Elder Care Trust Authority.
24 "Elder Care Savings Bonds" means general obligation bonds
25 of the State issued under the General Obligation Bond Act in
26 accordance with this Act and designated as General Obligation
27 Elder Care Savings Bonds.
28 Section 15. Issuance and sale of bonds.
29 (a) In order to provide investors with investment
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1 alternatives to enhance their financial access to long term
2 health care, and in furtherance of the public policy of this
3 Act, bonds authorized by the provisions of the General
4 Obligation Bond Act, in a total aggregate original principal
5 amount not to exceed $300,000,000 may be issued and sold from
6 time to time, and as often as practicable, as Elder Care
7 Savings Bonds in amounts directed by the Governor, upon
8 recommendation by the Director of the Bureau of the Budget.
9 Bonds to be issued and sold as Elder Care Savings Bonds shall
10 be designated by the Governor and the Director of the Bureau
11 of the Budget as "General Obligation Elder Care Savings
12 Bonds" in the proceedings authorizing the issuance of those
13 bonds and shall be subject to all of the terms and provisions
14 of the General Obligation Bond Act, except that Elder Care
15 Savings Bonds may bear interest payable at a time or times
16 and may be sold at prices and in a manner as determined by
17 the Governor and the Director of the Bureau of the Budget and
18 except as otherwise provided in this Act.
19 (b) If Elder Care Savings Bonds are sold at public sale,
20 the public sale procedures shall be as set forth in Section
21 11 of the General Obligation Bond Act. Elder Care Savings
22 Bonds may be sold at negotiated sale if the Director of the
23 Bureau of the Budget determines that a negotiated sale will
24 result in either a more efficient and economic sale of the
25 bonds or greater access to the bonds by investors who are
26 residents of the State of Illinois. If any Elder Care
27 Savings Bonds are sold at a negotiated sale, the underwriter
28 or underwriters to which the bonds are sold shall (i) be
29 organized, incorporated, or have their principal place of
30 business in the State of Illinois or (ii) in the judgment of
31 the Director of the Bureau of the Budget, have sufficient
32 capability to make a broad distribution of the bonds to
33 investors who reside in the State of Illinois.
34 (c) In determining the aggregate principal amount of
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1 Elder Care Savings Bonds that has been issued pursuant to
2 this Act, the aggregate original principal amount of those
3 bonds issued and sold shall be taken into account.
4 (d) Any bond issued under this Act shall be payable in
5 one payment on a fixed date, unless the Governor and the
6 Director of the Bureau of the Budget determine otherwise.
7 Section 20. Security of bonds.
8 (a) Any Elder Care Savings Bonds issued under the
9 General Obligation Bond Act in accordance with this Act shall
10 be direct, general obligations of the State of Illinois and
11 subject to repayment as provided in the General Obligation
12 Bond Act. In the proceedings of the Governor and the
13 Director of the Bureau of the Budget authorizing the issuance
14 of Elder Care Savings Bonds, however, those officials may
15 covenant on behalf of the State with or for the benefit of
16 the holders of those bonds as to all matters deemed advisable
17 by those officials, including the terms and conditions for
18 creating and maintaining sinking funds, reserve funds, and
19 other special funds created in those proceedings separate and
20 apart from all other funds and accounts of the State. Those
21 officials may make other covenants deemed necessary or
22 desirable to assure the prompt payment of the principal of
23 and interest on the bonds.
24 (b) The transfers to and appropriations from the General
25 Obligation Bond Retirement and Interest Fund required by the
26 General Obligation Bond Act shall be made at times and in
27 amounts as determined by the Governor and the Director of the
28 Bureau of the Budget and shall be made to and from any fund
29 or funds created pursuant to this Section for the payment of
30 the principal of and interest on any Elder Care Savings
31 Bonds.
32 Section 25. Compelling payment; remedies of bondholders.
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1 (a) If the State fails to pay the principal of or
2 interest on any Elder Care Savings Bonds or premium, if any,
3 as those amounts become due, or fails to make any required
4 monthly transfer of moneys to provide for the payment of the
5 principal, interest, or premium on the bonds, a civil action
6 to compel payment may be instituted in the Supreme Court of
7 Illinois as a court of original jurisdiction by the holder or
8 holders of the Elder Care Savings Bonds with respect to which
9 the default of payment or failure to make a required transfer
10 exists. Delivery of a summons and a copy of the complaint to
11 the Attorney General constitutes sufficient service to give
12 the Supreme Court of Illinois jurisdiction of the subject
13 matter of the suit and jurisdiction over the State and its
14 officers named as defendants for the purpose of compelling
15 the payment or transfer. Any case, controversy, or cause of
16 action concerning the validity of this Act relates to the
17 revenue of the State of Illinois.
18 (b) If the Supreme Court of Illinois denies the holder
19 or holders of bonds leave to file an original action in the
20 Supreme Court, the bond holder or holders may bring the
21 action in the Circuit Court of Sangamon County.
22 Section 30. Exemption from taxation. As provided in
23 this Act, the issuance of Elder Care Savings Bonds is in all
24 respects for the benefit of the People of the State of
25 Illinois, the conduct and increase of their commerce, the
26 protection and enhancement of their welfare, the development
27 of continued prosperity, and the improvement of their health
28 and living conditions, and the issuance of those bonds is for
29 public purposes. In consideration of those facts, Elder Care
30 Savings Bonds issued under the General Obligation Bond Act in
31 accordance with this Act and the income derived from those
32 bonds shall be free from all taxation by the State or its
33 political subdivisions, except for estate, transfer, and
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1 inheritance taxes.
2 Section 35. Grant program.
3 (a) The proceedings of the Governor and the Director of
4 the Bureau of the Budget authorizing the issuance of Elder
5 Care Savings Bonds shall also provide for a grant program of
6 additional financial incentives to be provided to holders of
7 those bonds to encourage the use of the bonds and the income
8 derived from the bonds for one or more of the following
9 purposes:
10 (1) Care in a facility licensed under the Nursing
11 Home Care Act.
12 (2) Home health nursing services or home health
13 aide services provided by a home health agency licensed
14 under the Home Health Agency Licensing Act.
15 (3) Respite care as defined in the Respite Program
16 Act.
17 (4) Custodial care services.
18 (5) Care in a hospice licensed under the Hospice
19 Program Licensing Act.
20 (6) Long term health care services for the aged,
21 the disabled, or persons diagnosed as infected with HIV
22 or having AIDS or a related condition. These services
23 include, without limitation, chore-housekeeping services,
24 a personal care attendant, adult day care, assistive
25 equipment, home renovation, home-delivered meals, and
26 emergency response systems. As used in this paragraph,
27 "AIDS" means acquired immunodeficiency syndrome; "HIV"
28 means the Human Immunodeficiency Virus or any other
29 identified causative agent of AIDS.
30 (b) The grant program of financial incentives shall be
31 administered by the State Treasurer pursuant to
32 administrative rules adopted by the Treasurer. The financial
33 incentives shall be in forms determined by the Governor and
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1 the Director of the Bureau of the Budget at the time of the
2 authorization of the Elder Care Savings Bonds and may
3 include, among others, supplemental payments to the holders
4 of the bonds at maturity to be applied to costs of care or
5 services specified in items (1) through (6) of subsection
6 (a). The Treasurer may establish, by rule, administrative
7 procedures and eligibility criteria for the grant program;
8 those rules must be consistent with the purposes of this Act.
9 The Treasurer may require bond holders, providers of long
10 term health care services, and other necessary parties to
11 assist in the determination of eligibility for financial
12 incentives under the grant program.
13 (c) All grants shall be subject to annual appropriation
14 of moneys for that purpose by the General Assembly.
15 Financial incentives shall be provided only if, in the sole
16 judgment of the Director of the Bureau of the Budget, the
17 cost of the incentives will not cause the cost to the State
18 of the proceeds of the Elder Care Savings Bonds being sold to
19 be increased by more than 0.5%.
20 Section 40. Education program. The State Treasurer shall
21 develop and implement an education program and marketing
22 strategies designed to inform residents of this State about
23 the options available for financing long term health care and
24 the need to accumulate the financial resources necessary to
25 pay for that care. The Treasurer shall report to the General
26 Assembly on the program developed and its operation before
27 May 1, 1998. The Treasurer shall adopt rules with respect to
28 his or her powers and duties under this Act.
29 Section 45. Elder Care Trust Authority.
30 (a) There is created the Elder Care Trust Authority.
31 The Authority shall consist of 11 members, 7 of whom shall be
32 appointed as follows: the Speaker and Minority Leader of the
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1 House of Representatives and the President and Minority
2 Leader of the Senate shall each appoint one member, and the
3 Governor shall appoint 3 members. The State Treasurer, the
4 Director of the Bureau of the Budget, and the Director of the
5 Illinois Economic and Fiscal Commission, or their respective
6 designees, shall each be a member ex officio. The Governor
7 and legislative leaders shall give consideration to selecting
8 members that include representatives from the following
9 categories: (i) a director, officer, or employee of an entity
10 that provides long term health care services; (ii) a person
11 having a favorable reputation for skill, knowledge, and
12 experience in the field of state and municipal finance,
13 either as a partner, officer, or employee of an investment
14 banking firm that originates and purchases state and
15 municipal securities or as an officer or employee of an
16 insurance company or bank whose duties relate to the purchase
17 of state and municipal securities as an investment and to the
18 management and control of a state and municipal securities
19 portfolio; and (iii) a person experienced in and having a
20 favorable reputation for skill, knowledge, and experience in
21 the long term health care loan finance field.
22 The State Treasurer or the Treasurer's designee shall
23 serve as the chairperson of the Authority.
24 The appointed members of the Authority first appointed
25 shall serve for terms expiring on June 30 in 1999, 2000,
26 2001, 2002, 2003, 2004, and 2005 respectively, or until their
27 respective successors have been appointed and have qualified.
28 The initial term of each of those members shall be determined
29 by lot. Upon the expiration of the term of any member, the
30 member's successor shall be appointed for a term of 6 years
31 and until his or her successor has been appointed and has
32 qualified.
33 Any vacancy shall be filled in the manner of the original
34 appointment for the remainder of the unexpired term.
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1 Any member of the Authority may be removed by the
2 appointing authority for misfeasance, malfeasance, or wilful
3 neglect of duty or other cause after notice and a public
4 hearing, unless that notice and hearing are expressly waived
5 by the member in writing.
6 Members shall be compensated from moneys appropriated to
7 the State Treasurer for their reasonable expenses actually
8 incurred in performing their duties.
9 Staff assistance shall be provided to the Authority by
10 the State Treasurer.
11 The Authority shall meet at least once each year.
12 (b) The Authority has the following responsibilities:
13 (1) To make recommendations to the Bureau of the
14 Budget regarding the marketing of Elder Care Savings
15 Bonds to ensure their broad distribution throughout the
16 State for long term health care purposes.
17 (2) To advise the Bureau of the Budget on an
18 effective advertising campaign to inform the general
19 public about Elder Care Savings Bonds and their
20 availability.
21 (3) To advise the Governor and the Director of the
22 Bureau of the Budget regarding the increments in which to
23 market the bonds, and to recommend maturity dates that
24 will make moneys available to purchasers at the time when
25 the moneys are needed for long term health care purposes.
26 (4) To advise the Bureau of the Budget on limits
27 that may be imposed on the amount of Elder Care Savings
28 Bonds that may be purchased by individual households.
29 (5) To advise the Bureau of the Budget on the
30 minimum denominations in which to market the Elder Care
31 Savings Bonds so that they are affordable by individuals.
32 (6) To evaluate the feasibility of staggered or
33 periodic forms of payments for Elder Care Savings Bonds,
34 and to advise the Bureau of the Budget regarding that
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1 evaluation.
2 (7) After the initial sale of Elder Care Savings
3 Bonds, to assess the effectiveness of the program and
4 recommend constructive changes to the Bureau of the
5 Budget regarding future bond sales.
6 (8) To study and review alternative investment
7 instruments with respect to their suitability for a long
8 term health care savings program.
9 (9) To make recommendations to the General Assembly
10 regarding statutory changes that the Authority deems
11 necessary or desirable.
12 Section 105. The Civil Administrative Code of Illinois
13 is amended by adding Section 56.5 as follows:
14 (20 ILCS 1405/56.5 new)
15 Sec. 56.5. Medicaid long term care coverage re-insurance
16 study. The Department of Insurance shall cooperate with and
17 provide consultation to the Department of Public Aid in
18 studying the feasibility of health maintenance organizations
19 providing acute care to the State's Medicaid long term care
20 recipients as provided in Section 48c of this Code.
21 Section 110. The Civil Administrative Code of Illinois
22 is amended by adding Section 48c as follows:
23 (20 ILCS 2205/48c new)
24 Sec. 48c. Medicaid long term care coverage study.
25 (a) The Department of Public Aid, in cooperation with
26 the Department of Insurance, shall undertake a study to
27 determine the feasibility of health maintenance organizations
28 providing acute care to the State's Medicaid long term care
29 recipients. The study shall provide an analysis of potential
30 cost savings and shall include a review of any similar plans
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1 operating in other states.
2 (b) The Department shall file its report as provided in
3 Section 3.1 of the General Assembly Organization Act no later
4 than February 1, 1998.
5 Section 115. The General Obligation Bond Act is amended
6 by changing Section 2 as follows:
7 (30 ILCS 330/2) (from Ch. 127, par. 652)
8 Sec. 2. Authorization for Bonds. The State of Illinois
9 is authorized to issue, sell and provide for the retirement
10 of General Obligation Bonds of the State of Illinois in the
11 total amount of $8,446,008,392 $8,146,008,392 herein called
12 "Bonds".
13 Of the total amount of bonds authorized above, up to
14 $1,700,000,000 in aggregate original principal amount may be
15 issued and sold in accordance with the Baccalaureate Savings
16 Act in the form of General Obligation College Savings Bonds.
17 Of the total amount of bonds authorized above, up to
18 $300,000,000 in aggregate original principal amount may be
19 issued and sold in accordance with the Retirement Savings Act
20 in the form of General Obligation Retirement Savings Bonds.
21 Of the total amount of bonds authorized above, up to
22 $300,000,000 in aggregate original principal amount may be
23 issued and sold in accordance with the Elder Care Savings
24 Bond Act in the form of General Obligation Elder Care Savings
25 Bonds.
26 The issuance and sale of Bonds pursuant to the General
27 Obligation Bond Act is an economical and efficient method of
28 financing the capital needs of the State. This Act will
29 permit the issuance of a multi-purpose General Obligation
30 Bond with uniform terms and features. This will not only
31 lower the cost of registration but also reduce the overall
32 cost of issuing debt by improving the marketability of
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1 Illinois General Obligation Bonds.
2 Bonds shall be issued for the categories and specific
3 purposes expressed in Sections 2 through 8 and Section 16 of
4 this Act.
5 (Source: P.A. 87-144; 87-173; 87-836; 87-873; 88-93; 88-472;
6 88-552, eff. 7-14-94; 88-670, eff. 12-2-94.)
7 Section 999. Effective date. This Act takes effect upon
8 becoming law.