S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  5418

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                            February 13, 2009
                               ___________

Introduced  by  M.  of A. ENGLEBRIGHT, CAHILL, DESTITO, PHEFFER, JACOBS,
  MILLMAN, KOON, DelMONTE, PEOPLES, PERRY, ARROYO, P. RIVERA, J. RIVERA,
  GALEF, SCHROEDER, MARKEY, COLTON, BOYLAND,  COOK,  BENEDETTO,  JAFFEE,
  MAISEL,  ROBINSON, GABRYSZAK, CARROZZA, MAYERSOHN, ESPAILLAT, SPANO --
  Multi-Sponsored by -- M.  of  A.  ABBATE,  ALFANO,  BRADLEY,  BRENNAN,
  BROOK-KRASNY, DIAZ, EDDINGTON, GORDON, GUNTHER, HEASTIE, HIKIND, HOOP-
  ER,  HYER-SPENCER,  JEFFRIES, JOHN, LANCMAN, V. LOPEZ, LUPARDO, MAGEE,
  McENENY, ORTIZ, PRETLOW,  ROSENTHAL,  SCARBOROUGH,  SCHIMEL,  SWEENEY,
  TOWNS,  WEISENBERG,  WRIGHT -- read once and referred to the Committee
  on Aging

AN ACT to amend the elder law, in relation to establishing the New  York
  state  compact  for  long  term  care;  and  to  amend the tax law, in
  relation to providing certain tax credits

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Article 2 of the elder law is amended by adding a new title
5 to read as follows:
                                 TITLE 5
                       COMPACT FOR LONG TERM CARE
SECTION 260. SHORT TITLE.
        261. DEFINITIONS.
        262. COMPACT FOR LONG TERM CARE CREATED; PURPOSES.
        263. REQUIREMENT FOR CONSULTATION.
        264. IMPLEMENTATION.
        265. SELECTION OF PROGRAM MANAGEMENT ENTITY.
        266. PARTICIPATION AND PLEDGE.
        267. BENEFITS OF PARTICIPATION.
        268. PROTECTED INCOME.
        269. IMPOSITION OF LIEN IN CERTAIN CASES.
        270. PROHIBITED ACTS.
        271. FRAUDULENT PRACTICES.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD08724-01-9
              

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        271-A. PAYMENTS AND DEFAULTS.
        272. APPEALS.
        273. TREATMENT OF ASSETS.
        274. SPECIAL PROVISIONS REGARDING SPOUSES.
        275. QUALIFIED LONG TERM CARE SAVINGS ACCOUNT.
        276. ADVISORY COMMITTEE.
        277. REQUIREMENT FOR CONFIDENTIALITY.
        278. EDUCATION AND INFORMATION.
  S  260. SHORT TITLE. THIS TITLE SHALL BE KNOWN AND MAY BE CITED AS THE
"NEW YORK COMPACT FOR LONG TERM CARE".
  S 261. DEFINITIONS. AS USED IN THIS TITLE:
  1. "ASSESSMENT" MEANS AN ASSESSMENT TO DETERMINE WHETHER AN INDIVIDUAL
IS A CHRONICALLY ILL INDIVIDUAL.  AN ASSESSMENT MAY BE PERFORMED ONLY BY
A LICENSED HEALTH CARE PRACTITIONER CONTRACTED TO PERFORM  SUCH  ASSESS-
MENTS  WITH AN INSURER, THE COMMISSIONER OR THE PROGRAM MANAGEMENT ENTI-
TY.  THE ASSESSMENT SHALL BE PERFORMED ANNUALLY OR WHENEVER A CHANGE  IN
THE  CONDITION  OF  THE  COMPACT  BENEFICIARY  OR  COMPACT  PARTICIPANTS
WARRANTS AN UPDATE TO THE PLAN OF CARE.  EXCEPT IN CASES  IN  WHICH  THE
COMMISSIONER  WAIVES  THE  REQUIREMENT  DUE  TO HARDSHIP, THE COST OF AN
ASSESSMENT SHALL BE PAID BY AN  INDIVIDUAL  SEEKING  TO  ENROLL  IN  THE
COMPACT PROGRAM.
  2.  "ADVISORY  COMMITTEE"  MEANS THE ADVISORY COMMITTEE ESTABLISHED BY
THE COMMISSIONER PURSUANT TO THIS TITLE.
  3. "COMMISSIONER" MEANS THE COMMISSIONER OF HEALTH.
  4. "COMPACT" MEANS THE COMPACT FOR LONG TERM CARE  PROGRAM  AUTHORIZED
BY THIS TITLE.
  5.  "COMPACT  BENEFICIARY" OR "BENEFICIARY" MEANS A PARTICIPANT WHO BY
FULFILLING HIS OR HER  PLEDGE  AMOUNT  AND  MEETING  OTHER  REQUIREMENTS
ESTABLISHED  PURSUANT  TO THIS TITLE HAS BECOME ELIGIBLE FOR THE COMPACT
SUBSIDY.
  6. "COMPACT PARTICIPANT" OR "PARTICIPANT"  MEANS  AN  INDIVIDUAL  WHO:
(A)  HAS  APPLIED FOR MEMBERSHIP IN THE COMPACT; (B) IS A STATE RESIDENT
RESIDING IN THIS STATE AT THE TIME OF SUCH  APPLICATION;  (C)  HAS  BEEN
DETERMINED  BY  ASSESSMENT  TO  BE A CHRONICALLY ILL PERSON; AND (D) HAS
AGREED TO FULFILL A PLEDGE AMOUNT AS PROVIDED IN THIS TITLE.  A  PARTIC-
IPANT SHALL BE DEEMED ENROLLED IN THE COMPACT PROGRAM.
  7.  "COMPACT RATE" MEANS THE RATE THAT A PROVIDER MAY CHARGE A COMPACT
BENEFICIARY FOR A SERVICE PROVIDED PURSUANT TO THE COMPACT. THE  COMPACT
RATE  SHALL  BE  THE  RATE COMPUTED BY THE COMMISSIONER PURSUANT TO THIS
TITLE WHICH IS NOT MORE THAN ONE HUNDRED  TEN  PERCENT  OF  THE  COMPACT
SUBSIDY FOR SUCH SERVICE PROVIDED BY SUCH PROVIDER.
  8.  "COMPACT SUBSIDY" OR "SUBSIDY" MEANS THE SUBSIDY PROVIDED PURSUANT
TO THE COMPACT FOR THE COSTS OF ANY QUALIFIED  LONG  TERM  CARE  SERVICE
RECEIVED BY A COMPACT BENEFICIARY PURSUANT TO THE PLAN OF CARE FOLLOWING
AN  ASSESSMENT.  THE AMOUNT OF THE SUBSIDY SHALL EQUAL THE MEDICAID RATE
ESTABLISHED FOR THE SAME OR A SIMILAR SERVICE PROVIDED BY THE INDIVIDUAL
PROVIDER SELECTED BY THE BENEFICIARY TO  PROVIDE  SUCH  SERVICE  IN  THE
REGION  IN  WHICH  THE BENEFICIARY RESIDES, IRRESPECTIVE OF THE PROVIDER
SELECTED BY THE BENEFICIARY. IN ANY CASE IN WHICH THERE IS  NO  MEDICAID
RATE  FOR  A SERVICE, THE COMMISSIONER SHALL ESTABLISH A COMPARABLE RATE
UPON RECOMMENDATION OF THE ADVISORY COMMITTEE WHICH SHALL BE  APPLICABLE
IN SUCH REGION FOR SUCH PROVIDER FOR SUCH SERVICE, AND THE AMOUNT OF THE
SUBSIDY  PROVIDED  PURSUANT  TO THE COMPACT FOR SUCH SERVICE SHALL EQUAL
SUCH ESTABLISHED RATE. THE COMMISSIONER SHALL ADJUST THE METHODOLOGY FOR
ESTABLISHING THE AMOUNT OF THE COMPACT SUBSIDY IF THE ADVISORY COMMITTEE
RECOMMENDS SUCH ADJUSTMENT.  THE ANNUAL COMPACT SUBSIDY FOR AN  INDIVID-

A. 5418                             3

UAL  BENEFICIARY  RECEIVING  NON-INSTITUTIONAL SERVICES FROM ONE OR MORE
PROVIDERS SHALL BE NO GREATER THAN THE  ANNUAL  REGIONAL  MEDICAID  RATE
COMPUTED FOR NURSING HOME SERVICES FOR THE REGION IN WHICH THE BENEFICI-
ARY RESIDES.
  9. "COUNTABLE ASSET" SHALL HAVE THE SAME MEANING AS IS ASCRIBED TO THE
TERM "ASSETS", AS DEFINED IN CLAUSE (I) OF SUBPARAGRAPH ONE OF PARAGRAPH
(D) OF SUBDIVISION FIVE OF SECTION THREE HUNDRED SIXTY-SIX OF THE SOCIAL
SERVICES  LAW  APPLICABLE TO TRANSFERS MADE AFTER AUGUST TENTH, NINETEEN
HUNDRED NINETY-THREE, UNLESS ANY SUCH TRANSFER OF AN ASSET  IS  EXEMPTED
PURSUANT  TO  THIS  TITLE  OR  BY  COMPACT RULES ESTABLISHED PURSUANT TO
PROCEDURES ESTABLISHED PURSUANT THERETO.  COUNTABLE ASSET SHALL  NOT  BE
DEEMED TO INCLUDE INCOME.
  10.  "COUNTABLE  INCOME" MEANS INCOME REQUIRED TO BE CONSIDERED IN THE
CASE OF A PERSON APPLYING FOR MEDICAID PURSUANT TO SECTION THREE HUNDRED
SIXTY-SIX OF THE SOCIAL SERVICES LAW, AND SHALL EXCLUDE,  DISREGARD  AND
DEDUCT  INCOME REQUIRED TO BE EXCLUDED, DISREGARDED OR DEDUCTED PURSUANT
TO SUCH SECTION, UNLESS  ANY  SUCH  INCOME,  EXCLUSIONS,  DISREGARDS  OR
DEDUCTIONS  ARE  EXEMPTED  OR  EXCLUDED  PURSUANT  TO THIS ARTICLE OR BY
COMPACT RULES ESTABLISHED PURSUANT TO  PROCEDURES  ESTABLISHED  IN  THIS
TITLE. EXPENDITURES FOR MEDICARE SUPPLEMENTAL INSURANCE POLICIES MEETING
THE STANDARDS ESTABLISHED PURSUANT TO SECTION THREE THOUSAND TWO HUNDRED
EIGHTEEN  OF THE INSURANCE LAW, EXPENDITURES FOR A MEDICARE PRESCRIPTION
DRUG PLAN APPROVED  PURSUANT  TO  PROCEDURES  ESTABLISHED  BY  THE  U.S.
DEPARTMENT  OF HEALTH AND HUMAN SERVICES, CONTRIBUTIONS MADE PURSUANT TO
THIS TITLE TO A QUALIFIED LONG TERM CARE SAVINGS ACCOUNT,  AND  PREMIUMS
FOR  THE  PURCHASE  OF  LONG  TERM CARE INSURANCE SHALL BE EXCLUDED FROM
COUNTABLE INCOME.
  11. "DIRECTOR" MEANS THE DIRECTOR OF THE STATE OFFICE FOR THE AGING.
  12. "FEDERAL ACT" MEANS THE HEALTH INSURANCE PORTABILITY AND  ACCOUNT-
ABILITY  ACT  OF  1996  OR  ANY SUCCESSOR THERETO, AND RULES PROMULGATED
THEREUNDER. THE FOLLOWING TERMS SHALL HAVE THE SAME  MEANINGS  AS  UNDER
THE  FEDERAL  ACT: "QUALIFIED LONG TERM CARE SERVICES"; "LICENSED HEALTH
CARE PRACTITIONER";  "ACTIVITIES  OF  DAILY  LIVING";  "CHRONICALLY  ILL
PERSON". ANY PROVISION OF ANY OTHER LAW TO THE CONTRARY NOTWITHSTANDING,
THE  DEPARTMENT  OF  HEALTH  SHALL  NOT BE AUTHORIZED TO ISSUE, ENACT OR
ENFORCE ANY REQUIREMENT OR DEFINITION THAT IS MORE RESTRICTIVE THAN SUCH
MEANINGS AS INCLUDED IN SUCH FEDERAL ACT.
  13. NOTWITHSTANDING ANY OTHER PROVISION OF THIS SECTION AND SOLELY FOR
PURPOSES OF DETERMINING  WHETHER  THE  CONDITION  OF  "SEVERE  COGNITIVE
IMPAIRMENT"  EXISTS  FOR  A  PARTICIPANT, THE COMMISSIONER SHALL REQUIRE
THAT SUCH CONDITION BE CHARACTERIZED BY A DETERIORATION OR  IRREVERSIBLE
LOSS  IN  INTELLECTUAL CAPACITY THAT REQUIRES SUBSTANTIAL SUPERVISION TO
ASSURE THE SAFETY OF THE PARTICIPANT OR OF OTHERS, AND THAT IT SHALL  BE
ESTABLISHED  BY  CLINICAL  EVIDENCE AND STANDARDIZED TESTS THAT RELIABLY
MEASURE: SHORT-TERM OR LONG-TERM MEMORY; ORIENTATION AS TO PEOPLE, PLACE
OR TIME; DEDUCTIVE OR ABSTRACT REASONING; AND JUDGMENT AS IT RELATES  TO
SAFETY  AWARENESS. THE MEANS OF DETERMINATION AS TO WHETHER A PERSON HAS
SUFFERED SEVERE COGNITIVE IMPAIRMENT SHALL INSOFAR AS PRACTICAL  BE  THE
SAME  AS  THOSE  USED  PURSUANT  TO  THE FEDERAL ACT TO DETERMINE SEVERE
COGNITIVE IMPAIRMENT.
  14. "SUBSTANTIAL  SUPERVISION"  MEANS  CONTINUAL  OVERSIGHT  THAT  MAY
INCLUDE  CUEING BY VERBAL PROMPTING, GESTURES OR OTHER DEMONSTRATIONS BY
ANOTHER PERSON, AND THAT  IS  NECESSARY  TO  PROTECT  THE  PATIENT  FROM
THREATS TO HIS OR HER HEALTH OR SAFETY.
  15.  "LICENSED  HEALTH  CARE PRACTITIONER" MEANS ANY OF THE FOLLOWING,
OTHER  THAN  A  FAMILY  MEMBER:  A  PHYSICIAN,  AS  DEFINED  IN  SECTION

A. 5418                             4

1861(R)(1)  OF THE SOCIAL SECURITY ACT; A REGISTERED PROFESSIONAL NURSE;
A LICENSED SOCIAL WORKER; OR ANOTHER PROFESSIONAL INDIVIDUAL  WHO  MEETS
THE REQUIREMENTS PRESCRIBED BY THE UNITED STATES SECRETARY OF THE TREAS-
URY PURSUANT TO THE FEDERAL ACT.
  16. "QUALIFIED LONG TERM CARE SERVICES" SHALL INCLUDE ANY EXPENSES FOR
LONG  TERM  MEDICAL  CARE  AND  SERVICES WHICH ARE OR, IN THE CASE OF AN
INDIVIDUAL WHO IS NOT A TAXPAYER, WHICH WOULD BE DEDUCTIBLE FROM FEDERAL
GROSS INCOME FOR SUCH TAXPAYER OR INDIVIDUAL AS LONG TERM CARE  SERVICES
PURSUANT  TO THE INTERNAL REVENUE CODE, AND BOTH MEDICAL AND NON-MEDICAL
SERVICES, INCLUDING HOME MODIFICATION  AND  THE  PROVISION  OF  SERVICES
COORDINATION  REQUIRED  PURSUANT  TO  THE  PLAN  OF  CARE  PREPARED BY A
LICENSED HEALTH CARE PRACTITIONER IN ORDER TO MAINTAIN A PARTICIPANT  OR
BENEFICIARY  IN HIS OR HER OWN HOME, AND SUCH ADDITIONAL SERVICES AS MAY
BE APPROVED BY THE COMMISSIONER  UPON  RECOMMENDATION  OF  THE  ADVISORY
COMMITTEE, SO LONG AS THE COMMISSIONER SHALL BE SATISFIED THAT INCLUSION
OF  SUCH  ADDITIONAL SERVICES DOES NOT PREVENT RECEIPT OF FEDERAL FINAN-
CIAL PARTICIPATION UNDER THE MEDICAL ASSISTANCE  PROGRAM  OR  UNDER  THE
COMPACT.
  17. "FULFILLED PLEDGE" MEANS A PLEDGE AMOUNT THAT HAS BEEN FULLY PAID.
ONLY  PAYMENTS  MADE  BY  A  PARTICIPANT,  OR BY ANY PERSON OR ENTITY ON
BEHALF OF SUCH PARTICIPANT, PRIOR TO THE PARTICIPANT  APPLYING  FOR  THE
COMPACT  SUBSIDY  SHALL  BE COUNTED AS ELIGIBLE PAYMENTS IN FULFILLING A
PLEDGE.  ELIGIBLE  PAYMENTS  SHALL  INCLUDE  REASONABLE  AND   NECESSARY
PAYMENTS  FOR  QUALIFIED  LONG TERM CARE SERVICES, INCLUDING MEDICAL AND
NON-MEDICAL EXPENSES INCURRED AND PAID PURSUANT TO THE PLAN OF CARE, AND
ANY ADDITIONAL EXPENSES AS MAY BE  APPROVED  BY  THE  COMMISSIONER  UPON
RECOMMENDATION  OF  THE  ADVISORY  COMMITTEE.  SUCH  PAYMENTS SHALL ALSO
INCLUDE  PAYMENTS  FOR  QUALIFIED  LONG  TERM  CARE  SERVICES  FOR   THE
THREE-MONTH  PERIOD  PRIOR  TO  AN  INDIVIDUAL  BECOMING  A PARTICIPANT.
COUNTABLE PAYMENTS MADE FOR  A  QUALIFIED  LONG  TERM  CARE  SERVICE  IN
FULFILLING  A  PLEDGE  SHALL  NOT BE GREATER THAN THE AMOUNT USUALLY AND
CUSTOMARILY CHARGED FOR SUCH SERVICE BY A  PROVIDER  TO  A  NON-MEDICAID
RECIPIENT.
  18.  "PLEDGE AMOUNT" MEANS THE PLEDGE MADE BY A PARTICIPANT TO PAY THE
COST OF QUALIFIED LONG TERM CARE SERVICES. THE PLEDGE AMOUNT  SHALL  BE:
(A)  THE  "MAXIMUM  PLEDGE  AMOUNT",  WHICH SHALL BE THE AMOUNT EQUAL TO
THIRTY-SIX MONTHS OF PAYMENT AT  THE  REGIONAL  RATE  FOR  NURSING  HOME
SERVICES  IN  THE REGION IN WHICH THE PARTICIPANT RESIDES, AS APPLICABLE
AT THE TIME OF APPLICATION TO THE COMPACT; OR  (B)  THE  "DOLLAR  PLEDGE
AMOUNT"  WHICH  SHALL  BE  AN AMOUNT EQUAL TO FIFTY PERCENT OF A PARTIC-
IPANT'S COUNTABLE ASSETS. IN THE CASE OF A PARTICIPANT  WHOSE  COUNTABLE
ASSETS  ARE  LESS  THAN FORTY THOUSAND DOLLARS, THE DOLLAR PLEDGE AMOUNT
SHALL BE LIMITED TO THE AMOUNT IN EXCESS OF A DEDUCTIBLE AMOUNT OF TWEN-
TY THOUSAND DOLLARS, AND THE COMMISSIONER SHALL  CALCULATE  SUCH  DOLLAR
PLEDGE  AMOUNT  BY SUBTRACTING SUCH DEDUCTIBLE AMOUNT OF TWENTY THOUSAND
DOLLARS FROM THE PARTICIPANT'S COUNTABLE ASSETS AND THE REMAINDER AMOUNT
SHALL EQUAL THE DOLLAR PLEDGE AMOUNT;  PROVIDED  THAT  THE  COMMISSIONER
SHALL  ANNUALLY  INCREASE  OR  DECREASE SUCH FORTY THOUSAND DOLLAR ASSET
AMOUNT AND SUCH TWENTY THOUSAND DOLLAR DEDUCTIBLE  AMOUNT  AT  THE  SAME
PERCENTAGE  RATE  AS  THE  INCREASE OR DECREASE IN THE REGIONAL RATE FOR
NURSING HOME SERVICES FOR THE REGION IN WHICH  THE  ELIGIBLE  INDIVIDUAL
RESIDES.
  19.  "REGION" MEANS THE FOLLOWING REGIONS: LONG ISLAND, NEW YORK CITY,
NORTHERN METROPOLITAN NEW YORK, NORTHEASTERN  NEW  YORK,  UTICA  REGION,
CENTRAL NEW YORK, ROCHESTER REGION AND WESTERN NEW YORK.

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  20. "REGIONAL RATE" MEANS THE RATE SET ANNUALLY BY THE COMMISSIONER AT
EQUAL TO THE AVERAGE OF ALL RATES, EXCLUSIVE OF MEDICAID RATES, PAID FOR
THE  SAME  OR  SIMILAR  SERVICES WITHIN A REGION. THE COMMISSIONER SHALL
COMPUTE AND ANNUALLY UPDATE REGIONAL RATES FOR EACH REGION OF THE  STATE
FOR  ANY  YEAR  NOT  LATER  THAN  THE  LAST WEEK OF DECEMBER OF THE YEAR
PRECEDING SUCH YEAR.
  S 262. COMPACT FOR LONG TERM CARE CREATED; PURPOSES.  THE COMPACT  FOR
LONG  TERM CARE IS HEREBY CREATED. ITS PURPOSE SHALL BE TO PROVIDE COOR-
DINATED COVERAGE FOR THE EXPENSES OF QUALIFIED LONG TERM  CARE  SERVICES
TO  ELIGIBLE  INDIVIDUALS,  A  PURPOSE  HEREBY  DECLARED  TO BE IN EVERY
RESPECT AN APPROPRIATE PUBLIC PURPOSE CONDUCTED FOR THE BENEFIT  OF  THE
PEOPLE OF THE STATE.
  S  263.  REQUIREMENT FOR CONSULTATION.  ANY PROVISION OF ANY OTHER LAW
TO THE CONTRARY NOTWITHSTANDING, AND IN ADDITION TO ANY  OTHER  REQUIRE-
MENT  IMPOSED  IN  THIS  TITLE,  THE COMMISSIONER SHALL CONSULT WITH THE
DIRECTOR AND WITH THE SUPERINTENDENT OF INSURANCE PRIOR  TO  TAKING  ANY
ACTION  CONCERNING  POLICY  OR  PROGRAM MATTERS REQUIRED OR PERMITTED BY
THIS TITLE, PROVIDED HOWEVER THAT THE FAILURE TO  RESPOND  TIMELY  TO  A
REQUEST  FOR  CONSULTATION AND ADVICE SHALL NOT IMPAIR OR INVALIDATE ANY
SUCH ACTION TAKEN BY THE COMMISSIONER.
  S 264. IMPLEMENTATION.  ANY PROVISION OF ANY OTHER LAW TO THE CONTRARY
NOTWITHSTANDING, THE COMMISSIONER IS  HEREBY  AUTHORIZED  TO  AND  SHALL
IMPLEMENT  THE  COMPACT FOR LONG TERM CARE PROGRAM CREATED BY THIS TITLE
AND TO SUBMIT SUCH WAIVER APPLICATIONS AND/OR STATE PLAN  AMENDMENTS  AS
MAY BE NECESSARY FOR SUCH IMPLEMENTATION, PROVIDED THAT SUCH PROGRAM AND
THE  PROVISIONS  OF  THIS  TITLE SHALL BE IMPLEMENTED ONLY IF AND FOR SO
LONG AS THE COMMISSIONER SHALL BE SATISFIED THAT  THEY  DO  NOT  PREVENT
RECEIPT  OF FEDERAL FINANCIAL PARTICIPATION UNDER THE MEDICAL ASSISTANCE
PROGRAM OR UNDER THE COMPACT.  IN APPLYING FOR THE WAIVER,  THE  COMMIS-
SIONER  SHALL  CONSULT WITH THE ADVISORY COMMITTEE CONCERNING SUBMISSION
OF APPROPRIATE CRITERIA FOR ASSURING THAT A SERVICE IS PROPERLY PROVIDED
AND MEETS APPROPRIATE STANDARDS OF QUALITY AND COST.
  S 265. SELECTION OF PROGRAM MANAGEMENT ENTITY.  1. THE COMMISSIONER IS
HEREBY AUTHORIZED TO AND SHALL CONTRACT WITH A PROGRAM MANAGEMENT ENTITY
TO ADMINISTER THE COMPACT. THE PROCESS FOR SELECTING A  PROGRAM  MANAGE-
MENT  ENTITY  TO  MANAGE THE COMPACT PROGRAM SHALL BE GOVERNED SOLELY BY
THIS TITLE.
  2. INSOFAR AS PERMITTED UNDER ANY FEDERAL WAIVERS OR STATE PLAN AMEND-
MENTS REQUIRED FOR IMPLEMENTATION, THE COMPACT SHALL  BE  MANAGED  BY  A
PROGRAM MANAGEMENT ENTITY CONTRACTED TO AND SELECTED BY THE COMMISSIONER
BY  A  REQUEST  FOR  PROPOSALS  OR  A REQUEST FOR QUALIFICATIONS IN THIS
TITLE.  SUCH ENTITY SHALL BE RESPONSIBLE FOR COORDINATING  AND  MANAGING
ALL  ASPECTS  OF THE COMPACT PROGRAM AND LIAISING WITH THE DEPARTMENT OF
HEALTH, INDIVIDUALS, INSURANCE COMPANIES AND OTHER  ENTITIES  TO  ASSURE
APPROPRIATE  COLLECTION AND VERIFICATION OF DATA, COLLECTION OF PAYMENTS
REQUIRED TO BE MADE TO THE STATE PURSUANT TO THIS TITLE, VERIFICATION OF
ASSESSMENTS  AND  CLAIMS  TRACKING,  AND  OTHER  SIMILAR  ADMINISTRATIVE
RESPONSIBILITIES.  THE  PROGRAM MANAGEMENT ENTITY SHALL NOT BE AN INSUR-
ANCE ENTITY OFFERING AN INSURANCE PLAN  UNDER  THE  COMPACT  OR,  UNLESS
REQUIRED  BY  FEDERAL  LAW  OR  REGULATION, OR AS A CONDITION OF FEDERAL
APPROVAL OF ANY WAIVERS OR STATE PLAN AMENDMENTS NECESSARY TO  IMPLEMENT
THE  COMPACT,  A  STATE  AGENCY OR A COVERED AUTHORITY AS SUCH TERMS ARE
DEFINED IN SECTION TWO-A OF THE STATE FINANCE LAW.
  3. THE COMMISSIONER, AFTER CONSULTATION WITH THE DIRECTOR OF THE DIVI-
SION OF THE BUDGET, SHALL WITHIN NINETY DAYS AFTER THE EFFECTIVE DATE OF
THIS SECTION, REPORT TO THE GOVERNOR AND THE LEGISLATURE WITH  RECOMMEN-

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DATIONS  FOR  THE  IMPLEMENTATION OF THE SELECTION PROCESS.  SUCH REPORT
SHALL DETAIL:
  (A) THE CRITERIA TO BE USED IN SELECTING THE ENTITY;
  (B) THE PROCESS TO BE USED IN THE SELECTION, INCLUDING THE ISSUANCE OF
REQUESTS FOR PROPOSALS, REQUESTS FOR QUALIFICATIONS OR OTHER MEANS;
  (C)  THE  NAMES OF ANY ENTITIES ENGAGED TO DEVELOP CRITERIA AND ASSIST
IN THE SELECTION;
  (D) TIMELINESS FOR  THE  SELECTION  OF  THE  ENTITY  AND  ISSUANCE  OF
CONTRACTS;
  (E) MARKETING PLANS FOR THE PROGRAM;
  (F) MEANS TO MAKE THE SELECTION PROCESS AS TRANSPARENT AS POSSIBLE;
  (G) MEANS BY WHICH TRADE AND COMPETITIVE SECRETS SHALL BE PROTECTED;
  (H)  MEANS BY WHICH INDIVIDUAL IDENTIFYING INFORMATION RELATING TO ANY
PATIENT OR CONSUMER ACQUIRED BY THE PROGRAM SHALL BE KEPT  CONFIDENTIAL;
AND
  (I)  ANY  OTHER INFORMATION THE DIRECTOR OF THE DIVISION OF THE BUDGET
OR THE COMMISSIONER SHALL DEEM PERTINENT.
  IN PREPARING THE REPORT, THE DIRECTOR OF THE DIVISION  OF  THE  BUDGET
AND  THE  COMMISSIONER SHALL CONSULT WITH THE ADVISORY COMMITTEE AND THE
SUPERINTENDENT OF INSURANCE, AND SHALL ADDITIONALLY CONVENE AN  ADVISORY
GROUP  OF  INSURERS AUTHORIZED TO WRITE LONG TERM CARE INSURANCE IN THIS
STATE TO PROVIDE COMMENTS ON THE REPORT,  OR  IF  CONVENING  SUCH  GROUP
SHALL  PROVE IMPRACTICABLE OR INAPPROPRIATE, SHALL SHARE THE REPORT WITH
SUCH INSURERS AND INCLUDE ANY WRITTEN COMMENTS RECEIVED FROM SUCH INSUR-
ERS AND THE ADVISORY COMMITTEE WHEN THE REPORT IS ISSUED TO THE GOVERNOR
AND THE LEGISLATURE.
  4. AFTER CONSIDERATION OF ANY COMMENTS THEY MAY RECEIVE CONCERNING THE
REPORT, THE COMMISSIONER AND/OR THE DIRECTOR  OF  THE  DIVISION  OF  THE
BUDGET, AS APPROPRIATE, SHALL PROMULGATE RULES AND REGULATIONS GOVERNING
THE  SELECTION  PROCESS  FOR A PROGRAM MANAGEMENT ENTITY. SUCH RULES AND
REGULATIONS SHALL REFLECT THE RECOMMENDATIONS  IN  THE  REPORT  AND  ANY
RECOMMENDATIONS  RECEIVED  BY  THE  COMMISSIONER AND THE DIRECTOR OF THE
DIVISION OF THE BUDGET.  THE PROGRAM MANAGEMENT ENTITY SHALL BE SELECTED
THROUGH ISSUANCE OF A  REQUEST  FOR  PROPOSALS  OR  IF  APPROPRIATE  AND
APPROVED BY THE DIRECTOR OF THE DIVISION OF THE BUDGET, BY ISSUANCE OF A
REQUEST  FOR  QUALIFICATIONS,  AND SUCH REQUEST FOR PROPOSALS OR REQUEST
FOR QUALIFICATIONS SHALL INCORPORATE THE CRITERIA AND  OTHER  CONDITIONS
AGREED  UPON AS A RESULT OF THE PROCESS REQUIRED IN THIS SUBDIVISION AND
IN SUBDIVISION THREE OF THIS SECTION.
  S 266. PARTICIPATION AND PLEDGE.   1.  AN  INDIVIDUAL  WHO  MEETS  THE
CRITERIA  FOR  BECOMING  A  PARTICIPANT SHALL BE ENROLLED IN THE COMPACT
PROGRAM. IN MEETING SUCH CRITERIA, THE INDIVIDUAL SHALL HAVE THE  OPTION
AT THE TIME OF APPLICATION TO PLEDGE EITHER THE MAXIMUM PLEDGE AMOUNT OR
THE DOLLAR PLEDGE AMOUNT.
  (A) AN INDIVIDUAL WHO ELECTS TO PLEDGE THE MAXIMUM PLEDGE AMOUNT SHALL
PAY OR  HAVE PAID ON HIS OR HER BEHALF BY ANY PERSON OR ENTITY AN AMOUNT
FOR  THE  PURCHASE OF QUALIFIED LONG TERM CARE SERVICES THAT IS EQUAL TO
THIRTY-SIX MONTHS OF PAYMENT AT  THE  REGIONAL  RATE  FOR  NURSING  HOME
SERVICES  IN  THE REGION IN WHICH THE PARTICIPANT RESIDES AS OF THE DATE
THE INDIVIDUAL APPLIES TO BECOME A PARTICIPANT BY HAVING MET  ALL  OTHER
QUALIFICATIONS AND BY MAKING SUCH PLEDGE.
  (B)  AN INDIVIDUAL WHO ELECTS TO PLEDGE THE DOLLAR PLEDGE AMOUNT SHALL
PAY OR HAVE PAID ON HIS OR HER BEHALF BY ANY PERSON OR ENTITY AN  AMOUNT
FOR  THE  PURCHASE OF QUALIFIED LONG TERM CARE SERVICES THAT IS EQUAL TO
FIFTY PERCENT OF A PARTICIPANT'S  COUNTABLE  ASSETS.    SUCH  INDIVIDUAL
SHALL SUBMIT: (I) A VERIFIED STATEMENT OF COUNTABLE ASSETS UNDER PENALTY

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OF  PERJURY  LISTING ALL COUNTABLE CURRENT ASSETS HELD BY THE INDIVIDUAL
AT THE TIME OF APPLICATION AND ANY ASSET TRANSFERS FOR  LESS  THAN  FULL
VALUE  DURING  THE  THREE YEARS PRECEDING SUCH DATE OF APPLICATION, (II)
THE INDIVIDUAL'S THREE MOST RECENT YEARS OF STATE AND FEDERAL INCOME TAX
RETURNS  AND  (III)  ADDITIONAL  DOCUMENTATION AS THE PROGRAM MANAGEMENT
ENTITY, WITH THE APPROVAL OF THE COMMISSIONER UPON RECOMMENDATION OF THE
ADVISORY COMMITTEE, SHALL DEEM  REASONABLE  AND  APPROPRIATE  TO  VERIFY
ASSETS, THE VALUES OF SUCH ASSETS AND THE VALIDITY OF THE PLEDGE AMOUNT.
  (C)  DOCUMENTATION  CONCERNING  THE  PLEDGE AMOUNT, THE RESULTS OF THE
ASSESSMENT AND EVIDENCE OF A FULFILLED PLEDGE SHALL BE SUBMITTED TO  THE
PROGRAM MANAGEMENT ENTITY IN A FORM AND MANNER PRESCRIBED BY THE COMMIS-
SIONER.
  (D)  THE  FOREGOING  PROVISIONS  OF  THIS  SUBDIVISION TO THE CONTRARY
NOTWITHSTANDING, THE PLEDGE AMOUNT MAY BE ADJUSTED IN THE EVENT THAT  AN
INDIVIDUAL IS SUBJECT TO EXTRAORDINARY CIRCUMSTANCES, AS THE COMMISSION-
ER SHALL DETERMINE BASED ON RECOMMENDATIONS OF THE ADVISORY COMMITTEE.
  2.  A  PARTICIPANT  WHO  FULFILLS  HIS OR HER PLEDGE SHALL BE DEEMED A
BENEFICIARY AND SHALL BE ELIGIBLE FOR THE COMPACT SUBSIDY. A PARTICIPANT
WHO FAILS TO FULFILL HIS OR HER PLEDGE SHALL NOT BE ELIGIBLE TO BECOME A
BENEFICIARY, BUT SHALL NOT SURRENDER ELIGIBILITY TO APPLY  FOR  MEDICAID
OR  ELIGIBILITY  TO  APPLY  FOR  THE COMPACT SUBSIDY IF SUCH PARTICIPANT
SHALL LATER BECOME ELIGIBLE.
  3. NOTWITHSTANDING  ANY  SIMILARITY  IN  ELIGIBILITY  REQUIREMENTS  OR
COMMONALITY  IN  THE DEFINITIONS OF ASSET, INCOME OR OTHER ITEMS, EXCEPT
AS OTHERWISE PROVIDED IN THIS TITLE, A PARTICIPANT  OR  BENEFICIARY,  AS
THE  CASE  MAY  BE,  SHALL  BE EXEMPT FROM THE RESOURCE TESTS, LIENS AND
OTHER REQUIREMENTS THAT WOULD OTHERWISE BE APPLICABLE TO PERSONS  APPLY-
ING FOR MEDICAL ASSISTANCE FOR THE NEEDY.
  4.  THE  PURCHASE OF QUALIFIED LONG TERM CARE SERVICES FOR THE PURPOSE
OF FULFILLING THE COMPACT PLEDGE SHALL NOT BE RESTRICTED TO THE PURCHASE
OF QUALIFIED LONG TERM CARE SERVICES IN THE STATE SO LONG AS  THE  INDI-
VIDUAL  MEETS  THE REQUIREMENTS OF THIS TITLE WITH RESPECT TO FULFILLING
THE PLEDGE REQUIRED UNDER THIS SECTION, PROVIDED HOWEVER THAT A  COMPACT
BENEFICIARY  MAY  ONLY RECEIVE THE COMPACT SUBSIDY FOR SERVICES RECEIVED
WITHIN THIS STATE.
  5. COUNTABLE PAYMENTS MADE FOR A QUALIFIED LONG TERM CARE  SERVICE  IN
FULFILLING  A  PLEDGE  SHALL  NOT BE GREATER THAN THE AMOUNT USUALLY AND
CUSTOMARILY CHARGED FOR SUCH SERVICE BY A  PROVIDER  TO  A  NON-MEDICAID
RECIPIENT  AND  SHALL INCLUDE REASONABLE AND NECESSARY EXPENSES PAID FOR
SUCH SERVICES, PROVIDED, HOWEVER THAT THE COMMISSIONER,  ON  RECOMMENDA-
TION OF THE ADVISORY COMMITTEE, MAY ESTABLISH CRITERIA FOR ASSURING THAT
A SERVICE IS PROPERLY PROVIDED AND MEETS APPROPRIATE STANDARDS OF QUALI-
TY  AND  COST.  THE  PROGRAM  MANAGEMENT  ENTITY  SHALL BE AUTHORIZED TO
UTILIZE SUCH CRITERIA IN ESTABLISHING PARAMETERS FOR PROPER  AND  APPRO-
PRIATE PAYMENT FOR SERVICES AND ASSURANCES OF QUALITY.
  S  267.  BENEFITS OF PARTICIPATION.  1. A BENEFICIARY WHO FULFILLS THE
MAXIMUM PLEDGE AMOUNT OR THE DOLLAR PLEDGE AMOUNT SHALL BE  ENTITLED  TO
PRESERVE  HIS  OR  HER  RESOURCES  AND  SHALL BE ELIGIBLE TO RECEIVE THE
COMPACT SUBSIDY FOR SERVICES PROVIDED TO SUCH  BENEFICIARY  PURSUANT  TO
THIS  TITLE.  SUCH  BENEFICIARY  SHALL  NOT BE REQUIRED TO SUBMIT TO ANY
RESOURCE REQUIREMENTS OR LIMITATIONS, OR TO  THE  RECOVERY  OF  PAYMENTS
MADE  BY THE STATE FROM THE ESTATES OF SUCH INDIVIDUALS, OR TO THE IMPO-
SITION OF LIENS ON THE HOMES OF PERSONS, SUCH AS THOSE WHICH ARE IMPOSED
ON BENEFICIARIES OF THE  MEDICAID  PROGRAM  PURSUANT  TO  SECTION  THREE
HUNDRED  SIXTY-SIX  OR  SECTION  THREE  HUNDRED SIXTY-NINE OF THE SOCIAL
SERVICES LAW.

A. 5418                             8

  2. A BENEFICIARY SHALL BE ELIGIBLE TO RECEIVE THE COMPACT  SUBSIDY  OR
TO  HAVE  THE  SUBSIDY PAID TO THE PROVIDER OF SERVICES FOR THE COSTS OF
QUALIFIED LONG TERM CARE SERVICES FROM ANY WILLING PROVIDER SELECTED  BY
SUCH BENEFICIARY.
  3. A BENEFICIARY SHALL BE ELIGIBLE TO RECEIVE SUCH QUALIFIED LONG TERM
CARE  SERVICES  AT  A RATE CHARGED BY A PROVIDER OF SERVICES WHICH IS NO
GREATER THAN THE COMPACT RATE.
  4. THE BENEFICIARY SHALL NOT BE RESPONSIBLE FOR PAYMENT FOR SUCH QUAL-
IFIED LONG TERM CARE SERVICES OF ANY AMOUNT GREATER THAN THE  DIFFERENCE
BETWEEN THE COMPACT RATE AND THE COMPACT SUBSIDY.
  5.  A  BENEFICIARY  SHALL  ANNUALLY  REMIT A PARTICIPATION FEE FOR THE
COMPACT PROGRAM WHICH SHALL NOT EXCEED TWENTY-FIVE PERCENT OF SUCH BENE-
FICIARY'S COUNTABLE INCOME TO THE COMMISSIONER OR, IF SO DIRECTED BY THE
COMMISSIONER, TO THE PROGRAM MANAGEMENT ENTITY FOR  TRANSMITTAL  TO  THE
COMMISSIONER.  THE  COMMISSIONER,  AFTER  CONSULTATION WITH THE ADVISORY
COMMITTEE, SHALL MAKE PROVISION TO ALLOW A BENEFICIARY TO MAKE  PAYMENTS
ON A MONTHLY OR OTHER BASIS, AT THE OPTION OF THE BENEFICIARY.
  6.  A BENEFICIARY SHALL RETAIN A PROTECTED AMOUNT OF INCOME DURING THE
PERIOD IN WHICH THE BENEFICIARY IS RECEIVING THE COMPACT SUBSIDY, AS SET
FORTH IN SECTION TWO HUNDRED SIXTY-EIGHT OF THIS TITLE.
  7. A PARTICIPANT WHO HAS BEEN DENIED LONG TERM CARE INSURANCE SHALL BE
ENTITLED TO ESTABLISH A QUALIFIED LONG  TERM  CARE  SAVINGS  ACCOUNT  AS
PROVIDED  IN  THIS  TITLE, AND USE THE PROCEEDS TO PAY FOR ANY LONG TERM
CARE SERVICES NEEDS, SUBJECT TO  THE  REQUIREMENTS  OF  THIS  TITLE  AND
APPLICABLE PROVISIONS OF TAX LAW.
  S  268. PROTECTED INCOME. 1. THE COMMISSIONER, AFTER CONSULTATION WITH
THE ADVISORY COMMITTEE, SHALL ESTABLISH PROVISIONS TO WAIVE ALL OR  PART
OF THE PARTICIPATION FEE AND ALL OR PART OF THE REQUIREMENT THAT A BENE-
FICIARY  PAY  ANY  DIFFERENCE  BETWEEN  THE COMPACT RATE AND THE COMPACT
SUBSIDY IF THE  BENEFICIARY'S  COUNTABLE  INCOME  IN  ANY  MONTH,  AFTER
DEDUCTION OF THE PARTICIPATION FEE AND PAYMENT OF THE DIFFERENCE BETWEEN
THE COMPACT RATE AND THE COMPACT SUBSIDY AMOUNT WHICH THE BENEFICIARY IS
REQUIRED TO PAY FOR SERVICES, SHALL BE LESS THAN THE FOLLOWING PROTECTED
INCOME AMOUNTS:
  (A)  FOR  AN  UNMARRIED BENEFICIARY RECEIVING CARE IN AN INSTITUTIONAL
SETTING SUCH AS A NURSING HOME, ADULT HOME, ASSISTED LIVING FACILITY  OR
OTHER  SIMILAR  FACILITY,  AN  AMOUNT  NOT  LESS  THAN THE INSTITUTIONAL
PROTECTED AMOUNT;
  (B) FOR AN UNMARRIED BENEFICIARY RECEIVING CARE AT HOME, AN AMOUNT NOT
LESS THAN THE MINIMUM MONTHLY MAINTENANCE NEEDS ALLOWANCE;
  (C) FOR A MARRIED COUPLE OF WHOM ONE IS A BENEFICIARY  RECEIVING  CARE
IN AN INSTITUTIONAL SETTING SUCH AS A NURSING HOME, ADULT HOME, ASSISTED
LIVING  FACILITY  OR OTHER SIMILAR FACILITY, AN AMOUNT NOT LESS THAN THE
INSTITUTIONAL PROTECTED AMOUNT FOR THE BENEFICIARY  AND  AN  AMOUNT  NOT
LESS THAN THE MINIMUM MONTHLY MAINTENANCE NEEDS ALLOWANCE FOR THE SPOUSE
WHO IS NOT A BENEFICIARY;
  (D)  FOR  A MARRIED COUPLE OF WHOM ONE IS A BENEFICIARY RECEIVING CARE
AT HOME, AN AMOUNT NOT LESS THAN TWICE THE MINIMUM  MONTHLY  MAINTENANCE
NEEDS ALLOWANCE;
  (E) FOR A MARRIED COUPLE BOTH OF WHOM ARE BENEFICIARIES RECEIVING CARE
IN AN INSTITUTIONAL SETTING SUCH AS A NURSING HOME, ADULT HOME, ASSISTED
LIVING  FACILITY  OR  OTHER SIMILAR FACILITY, AN AMOUNT NOT LESS THAN AN
INSTITUTIONAL PROTECTED AMOUNT FOR EACH BENEFICIARY; AND
  (F) FOR A MARRIED COUPLE BOTH OF WHOM ARE BENEFICIARIES RECEIVING CARE
AT HOME, AN AMOUNT NOT LESS THAN TWICE THE MINIMUM  MONTHLY  MAINTENANCE
NEEDS ALLOWANCE.

A. 5418                             9

  2. THE COMMISSIONER SHALL ANNUALLY ADJUST SUCH INSTITUTIONAL PROTECTED
AMOUNT  BY  THE  PERCENTAGE  INCREASE  OR DECREASE IN THE COST OF LIVING
INDEX, USING THE YEAR IN WHICH THIS TITLE SHALL HAVE BECOME LAW  AS  THE
BASE YEAR.
  3.  AS USED IN THIS SECTION, "MINIMUM MONTHLY MAINTENANCE NEEDS ALLOW-
ANCE" MEANS THE SAME AS SUCH TERM IS DEFINED IN PARAGRAPH (H) OF  SUBDI-
VISION  TWO  OF SECTION THREE HUNDRED SIXTY-SIX-C OF THE SOCIAL SERVICES
LAW AND "INSTITUTIONAL PROTECTED AMOUNT" MEANS THE SUM  OF  ONE  HUNDRED
DOLLARS,  WHICH AMOUNT SHALL BE ADJUSTED BY THE COMMISSIONER ANNUALLY BY
THE SAME PERCENTAGE AS THE PERCENTAGE INCREASE IN THE  FEDERAL  CONSUMER
PRICE INDEX.
  4.  WHEN MAKING THE COMPUTATION TO DETERMINE IF A BENEFICIARY'S INCOME
WOULD FALL BELOW THE APPROPRIATE PROTECTED INCOME  AMOUNT,  THE  COMMIS-
SIONER  SHALL  SUBTRACT  FROM THE BENEFICIARY'S MONTHLY COUNTABLE INCOME
THE DIFFERENCE BETWEEN THE COMPACT RATE AND THE COMPACT SUBSIDY THAT THE
BENEFICIARY IS REQUIRED TO PAY, AND THEN THE PARTICIPATION FEE.  IF  THE
REMAINING  COUNTABLE  INCOME  AFTER  SUCH  SUBTRACTION  IS LESS THAN THE
PROTECTED AMOUNT  APPROPRIATE  TO  SUCH  BENEFICIARY,  THE  COMMISSIONER
SHALL,   AFTER  CONSULTATION  WITH  THE  ADVISORY  COMMITTEE,  ESTABLISH
PROVISIONS FOR: (A) A REDUCTION IN PAYMENT FOR SERVICES BY THE BENEFICI-
ARY OF ANY DIFFERENCE BETWEEN THE COMPACT RATE AND THE COMPACT  SUBSIDY,
(B) A REDUCTION IN THE AMOUNT OF THE PARTICIPATION FEE TO BE PAID BY THE
BENEFICIARY,  AND  (C)  THE  PERIOD  OF  TIME  DURING WHICH REDUCTION OR
REDUCTIONS SHALL BE EFFECTIVE, IN ORDER TO ASSURE THAT  THE  BENEFICIARY
SHALL ALWAYS RETAIN THE PROTECTED AMOUNT OF INCOME.
  5.  ANY OTHER PROVISION OF THIS TITLE TO THE CONTRARY NOTWITHSTANDING,
THE COMMISSIONER MAY ADDITIONALLY,  AFTER  CONSULTATION  WITH  AND  UPON
RECOMMENDATION  OF  THE  ADVISORY  COMMITTEE, ESTABLISH AS AN ADDITIONAL
BASIS FOR A REDUCTION OF THE PAYMENT FOR SERVICES BY THE BENEFICIARY  OF
ANY  DIFFERENCE  BETWEEN THE COMPACT RATE AND THE COMPACT SUBSIDY AND OF
THE PARTICIPATION FEE TO BE PAID BY THE BENEFICIARY, A  FINDING  THAT  A
BENEFICIARY  LACKS  THE RESOURCES AFTER PAYMENT OF NECESSARY EXPENSES TO
REMAIN IN HIS OR HER PLACE OF RESIDENCE AFTER PAYMENT  OF  SUCH  PARTIC-
IPATION  FEE  AND/OR  PAYMENT  FOR SERVICES, IRRESPECTIVE OF WHETHER THE
BENEFICIARY'S COUNTABLE INCOME EXCEEDS THE PROTECTED INCOME AMOUNT.  THE
ADVISORY COMMITTEE SHALL PROVIDE THE COMMISSIONER WITH A  DEFINITION  OF
NECESSARY  EXPENSES  AS  USED  IN THIS SECTION PRIOR TO THE COMMISSIONER
TAKING ANY ACTION AUTHORIZED BY THIS SUBDIVISION. INSOFAR  AS  PRACTICA-
BLE,  SUCH  DEFINITION SHALL BE QUANTIFIABLE, AND THE COMMISSIONER SHALL
ESTABLISH A FORMULA BY RULE AND  REGULATION  FOR  DETERMINING  NECESSARY
EXPENSES  BASED ON SUCH DEFINITION AND FOR DETERMINING WHETHER A BENEFI-
CIARY LACKS THE RESOURCES AFTER PAYMENT OF SUCH  NECESSARY  EXPENSES  TO
REMAIN IN HIS OR HER PLACE OF RESIDENCE.
  S 269. IMPOSITION OF LIEN IN CERTAIN CASES.  NOTHING CONTAINED IN THIS
TITLE  SHALL  PREVENT  THE  IMPOSITION OF A LIEN OR RECOVERY AGAINST THE
PROPERTY OF AN INDIVIDUAL ON ACCOUNT OF EXPENSES INCORRECTLY PAID  UNDER
THE COMPACT SUBSIDY.
  S  270. PROHIBITED ACTS. NO PERSON ENGAGED IN THE DEVELOPMENT, MARKET-
ING, ADVERTISING OR SALE OF ANY INSURANCE PLAN DESIGNED TO  SATISFY  THE
PLEDGE AMOUNT SHALL:
  1. GIVE LEGAL ADVICE OR OTHERWISE ENGAGE IN THE PRACTICE OF LAW.
  2. ASSUME, USE OR ADVERTISE THE TITLE OF LAWYER OR ATTORNEY AT LAW, OR
EQUIVALENT  TERMS  IN  THE  ENGLISH  LANGUAGE  OR ANY OTHER LANGUAGE, OR
REPRESENT OR ADVERTISE OTHER TITLES OR CREDENTIALS,  INCLUDING  BUT  NOT
LIMITED TO "NOTARY PUBLIC", "ACCREDITED REPRESENTATIVE OF THE DEPARTMENT
OF  HEALTH"  OR  "COMPACT CONSULTANT", THAT COULD CAUSE AN INDIVIDUAL TO

A. 5418                            10

BELIEVE THAT THE PERSON POSSESSES  SPECIAL  PROFESSIONAL  SKILLS  OR  IS
AUTHORIZED  TO PROVIDE ADVICE ON MATTER RELATED TO THE COMPACT; PROVIDED
THAT A NOTARY PUBLIC APPOINTED AND  COMMISSIONED  BY  THE  SECRETARY  OF
STATE MAY USE THE TITLE "NOTARY PUBLIC".
  3.  STATE  OR  IMPLY THAT THE PERSON CAN OR WILL OBTAIN SPECIAL FAVORS
FROM OR HAS SPECIAL INFLUENCE WITH THE DEPARTMENT OF HEALTH, THE  ADMIN-
ISTRATIVE ENTITY OR ANY OTHER GOVERNMENTAL ENTITY.
  4.  DEMAND  OR  RETAIN  ANY  FEES  OR  COMPENSATION  FOR  SERVICES NOT
PERFORMED OR COSTS THAT ARE NOT ACTUALLY INCURRED.
  5. ADVISE, DIRECT OR PERMIT  A  CUSTOMER  TO  ANSWER  QUESTIONS  ON  A
GOVERNMENT DOCUMENT, OR IN A DISCUSSION WITH A GOVERNMENT OFFICIAL, IN A
SPECIFIC  WAY WHERE SUCH PERSON KNOWS OR HAS REASONABLE CAUSE TO BELIEVE
THAT THE ANSWERS ARE FALSE OR MISLEADING.
  6. DISCLOSE ANY INFORMATION TO, OR FILE ANY FORMS  OR  DOCUMENTS  WITH
THE  DEPARTMENT OF HEALTH, ANY OTHER STATE DEPARTMENT OR THE ADMINISTRA-
TIVE ENTITY WITHOUT THE KNOWLEDGE OR CONSENT OF THE CUSTOMER.
  7. FAIL TO PROVIDE AN INDIVIDUAL WITH COPIES OF DOCUMENTS FILED WITH A
GOVERNMENTAL ENTITY OR REFUSE TO RETURN ORIGINAL DOCUMENTS SUPPLIED  BY,
PREPARED ON BEHALF OF OR PAID FOR BY THE INDIVIDUAL, UPON THE REQUEST OF
THE  INDIVIDUAL.  ORIGINAL  DOCUMENTS  MUST  BE  RETURNED  PROMPTLY UPON
REQUEST, EVEN IF THERE IS A FEE DISPUTE WITH THE INDIVIDUAL.
  8. MAKE ANY MISREPRESENTATION OR FALSE STATEMENT,  DIRECTLY  OR  INDI-
RECTLY.
  9.  MAKE  ANY GUARANTEE OR PROMISE TO AN INDIVIDUAL, UNLESS THERE IS A
BASIS IN FACT FOR SUCH REPRESENTATION, AND THE GUARANTEE OR  PROMISE  IS
IN WRITING.
  S  271.  FRAUDULENT PRACTICES.  1. A PARTICIPANT WHO KNOWINGLY ENGAGES
IN FRAUDULENT PRACTICES WITH RESPECT TO FULFILLING OR CLAIMING  TO  HAVE
FULFILLED  A  PLEDGE  AMOUNT  SHALL  BE  DISQUALIFIED  FROM  THE COMPACT
PROGRAM. SUCH INDIVIDUAL SHALL NOT BE DEEMED  TO  BE  A  PARTICIPANT  OR
BENEFICIARY OR TO HAVE FULFILLED HIS OR HER PLEDGE AMOUNT, BUT SHALL NOT
SURRENDER ELIGIBILITY TO APPLY FOR MEDICAID.
  2.  ANY  INDIVIDUAL WHO KNOWINGLY MAKES A FALSE STATEMENT OR REPRESEN-
TATION, OR WHO BY DELIBERATE CONCEALMENT OF ANY  MATERIAL  FACT,  OR  BY
IMPERSONATION  OR OTHER FRAUDULENT DEVICE, OBTAINS OR ATTEMPTS TO OBTAIN
OR AIDS OR ABETS ANY INDIVIDUAL TO QUALIFY TO BECOME A PARTICIPANT OR  A
BENEFICIARY UNDER THE COMPACT PROGRAM WHEN SUCH INDIVIDUAL IS NOT OTHER-
WISE  ENTITLED  TO BECOME A PARTICIPANT OR A BENEFICIARY SHALL BE GUILTY
OF A CLASS A MISDEMEANOR, UNLESS SUCH ACT CONSTITUTES A VIOLATION  OF  A
PROVISION  OF THE PENAL LAW, IN WHICH CASE SUCH PERSON SHALL BE PUNISHED
IN ACCORDANCE WITH THE PENALTIES FIXED BY SUCH PROVISION.
  3. ANY INDIVIDUAL WHO, WITH INTENT TO DEFRAUD, PRESENTS FOR  ALLOWANCE
OR  PAYMENT  ANY  FALSE  OR  FRAUDULENT CLAIM FOR FURNISHING SERVICES OR
MERCHANDISE, OR WHO KNOWINGLY SUBMITS FALSE INFORMATION FOR THE  PURPOSE
OF  OBTAINING GREATER COMPENSATION THAN THAT TO WHICH SUCH INDIVIDUAL IS
LEGALLY ENTITLED FOR FURNISHING SERVICES OR MERCHANDISE, OR WHO KNOWING-
LY SUBMITS FALSE INFORMATION FOR THE PURPOSE OF OBTAINING  AUTHORIZATION
FOR FURNISHING SERVICES OR MERCHANDISE UNDER THIS TITLE, SHALL BE GUILTY
OF  A  CLASS A MISDEMEANOR, UNLESS SUCH ACT CONSTITUTES A VIOLATION OF A
PROVISION OF THE PENAL LAW, IN WHICH CASE HE OR SHE SHALL BE PUNISHED IN
ACCORDANCE WITH THE PENALTIES FIXED BY SUCH PROVISION.  SUCH  INDIVIDUAL
SHALL  NOT  BE PERMITTED TO PROVIDE SERVICES OR MERCHANDISE TO A PARTIC-
IPANT, A BENEFICIARY  OR  TO  ANOTHER  INDIVIDUAL  OR  ENTITY  PROVIDING
SERVICES UNDER THE COMPACT PROGRAM FOR A PERIOD OF FIVE YEARS.

A. 5418                            11

  4.  NOTHING  CONTAINED IN THIS TITLE SHALL PREVENT THE IMPOSITION OF A
LIEN OR RECOVERY AGAINST THE PROPERTY OF AN INDIVIDUAL WHO HAS COMMITTED
AN ACT OR ACTS IN VIOLATION OF THIS SECTION.
  S  271-A.  PAYMENTS AND DEFAULTS. 1. PAYMENTS TO SERVICE PROVIDERS FOR
SERVICES TO COMPACT PARTICIPANTS SHALL  BE  MADE  BY  OR  ON  BEHALF  OF
PARTICIPANTS OR A PERSON OR ENTITY ACTING ON BEHALF OF THE PARTICIPANT.
  2.  PAYMENTS  TO  SERVICE  PROVIDERS  FOR SERVICES PROVIDED TO COMPACT
BENEFICIARIES SHALL BE MADE AS FOLLOWS: THE  COMPACT  SUBSIDY  SHALL  BE
PAID  TO  THE SERVICE PROVIDER BY THE PROGRAM MANAGEMENT ENTITY, AND THE
BENEFICIARY OR A PERSON OR ENTITY ACTING ON BEHALF  OF  THE  BENEFICIARY
SHALL  BE  RESPONSIBLE FOR PAYMENT OF ANY DIFFERENCE BETWEEN THE COMPACT
RATE AND THE COMPACT SUBSIDY.
  3. A BENEFICIARY WHO KNOWINGLY FAILS TO PAY THE DIFFERENCE BETWEEN THE
COMPACT RATE AND THE COMPACT SUBSIDY AS REQUIRED IN THIS  TITLE,  UNLESS
SUCH  BENEFICIARY IS EXCUSED PURSUANT TO THE HARDSHIP PROVISIONS OF THIS
TITLE, SHALL BE LIABLE TO THE SERVICE PROVIDER, WHO MAY EXERCISE ANY AND
ALL APPROPRIATE REMEDIES FOR COLLECTION OF THE DEBT.
  4. A PARTICIPANT WHO KNOWINGLY DEFAULTS ON PAYMENT OF THE PLEDGE, OR A
BENEFICIARY WHO KNOWINGLY DEFAULTS ON PAYMENT OF THE DIFFERENCE  BETWEEN
THE COMPACT RATE AND THE COMPACT SUBSIDY, AND WHO IS THEREFORE NO LONGER
ENROLLED IN THE PROGRAM, SHALL NOT BE ELIGIBLE TO RECEIVE ANY PROTECTION
OF ASSETS OR INCOME OTHERWISE AFFORDED TO PARTICIPANTS AND BENEFICIARIES
BY  VIRTUE OF ENROLLMENT IN THE PROGRAM. NOTHING CONTAINED IN THIS TITLE
SHALL BE DEEMED TO SHIELD OR OTHERWISE EXCUSE A BENEFICIARY OR A PARTIC-
IPANT FROM PAYMENT OF A DEBT LAWFULLY INCURRED TO A SERVICE PROVIDER.
  5. UPON RECOMMENDATION OF THE ADVISORY COMMITTEE, THE COMMISSIONER MAY
ESTABLISH RULES, INCLUDING REQUIREMENTS FOR WRITTEN AGREEMENTS,  GOVERN-
ING THE PAYMENT AND COLLECTION OF DEBT BY PARTICIPANTS AND BENEFICIARIES
TO SERVICE PROVIDERS AS WELL AS NOTIFICATION GUIDELINES TO THE BENEFICI-
ARY, OR A PERSON OR ENTITY ACTING ON BEHALF OF THE BENEFICIARY TO ENSURE
THAT  A PAYMENT THAT IS MISSED IN ERROR CAN BE CORRECTED WITHOUT PUNISH-
MENT TO THE BENEFICIARY.
  S 272. APPEALS.  1. ANY PERSON OR AN INDIVIDUAL AUTHORIZED TO  ACT  ON
BEHALF  OF ANY SUCH PERSON MAY APPEAL TO THE COMMISSIONER FROM DECISIONS
OF THE PROGRAM MANAGEMENT ENTITY UPON GROUNDS SPECIFIED IN THIS SECTION.
ANY APPEAL PURSUANT TO THIS SECTION SHALL BE REQUESTED WITHIN SIXTY DAYS
AFTER THE DATE OF THE ACTION OR FAILURE TO ACT COMPLAINED OF.
  2. THE GROUNDS FOR SUCH APPEALS SHALL BE SPECIFIED IN  REGULATIONS  OF
THE  DEPARTMENT  OF  HEALTH,  AND  SHALL  INCLUDE BUT NOT BE LIMITED TO,
DENIAL OF AN APPLICATION TO BECOME A PARTICIPANT, FAILURE TO ACT UPON AN
APPLICATION TO BECOME A PARTICIPANT, FAILURE  OF  A  PARTICIPANT  TO  BE
DEEMED  ELIGIBLE  FOR  THE  COMPACT SUBSIDY WITHIN THIRTY DAYS OF FILING
INFORMATION ESTABLISHING THAT SUCH PARTICIPANT HAS MET THE  REQUIREMENTS
OF  BECOMING  A  BENEFICIARY,  AND  ANY  OTHER  PROVISION OF THE COMPACT
PROGRAM. DECISIONS OF THE COMMISSIONER PURSUANT TO THIS SECTION SHALL BE
BINDING UPON THE PROGRAM MANAGEMENT  ENTITY.  SUCH  GROUNDS  FOR  APPEAL
SHALL  NOT  INCLUDE  DENIALS FOR ISSUES AND CIRCUMSTANCES RELATED TO THE
LANGUAGE, PROCESSING OR APPROVAL OF COVERAGE  UNDER  A  LONG  TERM  CARE
INSURANCE  POLICY WHICH ARE OTHERWISE THE SUBJECT OF EXTERNAL APPEALS OF
ADVERSE DETERMINATIONS OF HEALTH CARE PLANS  PURSUANT  TO  SECTIONS  TWO
HUNDRED  ONE,  THREE  HUNDRED  ONE, ONE THOUSAND ONE HUNDRED NINE, THREE
THOUSAND TWO HUNDRED ONE, THREE  THOUSAND  TWO  HUNDRED  SIXTEEN,  THREE
THOUSAND  TWO HUNDRED SEVENTEEN, THREE THOUSAND TWO HUNDRED SEVENTEEN-A,
THREE THOUSAND TWO HUNDRED TWENTY-ONE, FOUR THOUSAND TWO  HUNDRED  THIR-
TY-FIVE,  FOUR THOUSAND THREE HUNDRED THREE, FOUR THOUSAND THREE HUNDRED
FOUR, FOUR THOUSAND THREE HUNDRED  FIVE,  FOUR  THOUSAND  THREE  HUNDRED

A. 5418                            12

TWENTY-ONE,  FOUR  THOUSAND  THREE  HUNDRED TWENTY-TWO AND FOUR THOUSAND
THREE HUNDRED TWENTY-FOUR, ARTICLE FORTY-SEVEN AND ARTICLE FORTY-NINE OF
THE INSURANCE LAW AND CHAPTER FIVE HUNDRED EIGHTY-SIX  OF  THE  LAWS  OF
NINETEEN HUNDRED NINETY-EIGHT.
  3. ANY AGGRIEVED PARTY TO AN APPEAL, OTHER THAN THE PROGRAM MANAGEMENT
ENTITY, MAY APPLY FOR REVIEW AS PROVIDED IN ARTICLE SEVENTY-EIGHT OF THE
CIVIL PRACTICE LAW AND RULES.
  S 273. TREATMENT OF ASSETS.  1. A PARTICIPANT'S HOMESTEAD SHALL NOT BE
DEEMED  A COUNTABLE ASSET IF THE HOMESTEAD WAS PURCHASED MORE THAN THREE
YEARS PRIOR TO THE DATE THAT AN INDIVIDUAL APPLIES TO BECOME  A  PARTIC-
IPANT  IN  THE COMPACT PROGRAM. A HOMESTEAD PURCHASED WITHIN THREE YEARS
OF SUCH DATE SHALL BE DEEMED A COUNTABLE ASSET, UNLESS SUCH HOMESTEAD IS
A REPLACEMENT FOR A HOMESTEAD SOLD WITHIN ONE YEAR PRIOR TO THE PURCHASE
DATE, IN WHICH CASE AN AMOUNT EQUAL TO THE DIFFERENCE BETWEEN  THE  SALE
PRICE  OF  THE OLD HOMESTEAD AND THE PURCHASE PRICE OF THE NEW HOMESTEAD
SHALL BE DEEMED A COUNTABLE ASSET. AS USED IN THIS SECTION,  "HOMESTEAD"
MEANS  THE  PRIMARY  RESIDENCE  OCCUPIED BY A BENEFICIARY OR PARTICIPANT
AND/OR MEMBERS OF HIS OR HER FAMILY.  FAMILY  MEMBERS  MAY  INCLUDE  THE
BENEFICIARY'S  OR  PARTICIPANT'S SPOUSE, MINOR CHILDREN, CERTIFIED BLIND
OR CERTIFIED DISABLED CHILDREN, A CARETAKER CHILD, AND  OTHER  DEPENDENT
RELATIVES.  HOMESTEAD SHALL BE DEEMED TO MEAN AND INCLUDE THE HOME, LAND
AND INTEGRAL PARTS SUCH AS GARAGES AND OUTBUILDINGS, AND MAY BE A CONDO-
MINIUM, COOPERATIVE APARTMENT OR MANUFACTURED HOME. HOMESTEAD SHALL  NOT
BE  DEEMED  TO  MEAN  AND  INCLUDE VACATION HOMES, SUMMER HOMES OR OTHER
PREMISES NOT USED AS A PRIMARY RESIDENCE.
  2. ANY OTHER PROVISION OF ANY OTHER  LAW  OR  OF  THIS  TITLE  TO  THE
CONTRARY  NOTWITHSTANDING, THE COMMISSIONER, ACTING ON RECOMMENDATION OF
THE ADVISORY COMMITTEE, MAY EXEMPT CERTAIN INCOME AND  RESOURCES  OF  AN
INDIVIDUAL  AND OF THE INDIVIDUAL'S SPOUSE FROM INCLUSION AS A COUNTABLE
ASSET.
  3. (A) WITH RESPECT TO ANNUITIES, (I)  THE  PRINCIPAL  AMOUNT  OF  ANY
ANNUITY  SHALL  BE DEEMED A COUNTABLE ASSET IF SUCH ANNUITY IN PERMANENT
PAYOUT STATUS WAS PURCHASED WITHIN THREE YEARS OF THE DATE AN INDIVIDUAL
APPLIES TO BECOME  A  PARTICIPANT,  PROVIDED  HOWEVER  THAT  ANY  PAYOUT
AMOUNTS SHALL NOT BE TREATED AS INCOME FOR PURPOSES OF THE INCOME CALCU-
LATION;  (II)  THE PRINCIPAL AMOUNT OF ANY ANNUITY SHALL NOT BE DEEMED A
COUNTABLE ASSET IF A LEVEL PAYMENT SCHEDULE HAS BEEN IN FORCE FOR  THREE
YEARS  OR  MORE  PRIOR  TO  THE  DATE  AN INDIVIDUAL APPLIES TO BECOME A
PARTICIPANT, AND NEITHER THE INDIVIDUAL NOR  A  PERSON  ACTING  ON  SUCH
INDIVIDUAL'S  BEHALF  HAS  THE  ABILITY TO WITHDRAW AMOUNTS IN EXCESS OF
SCHEDULED PAYMENTS, PROVIDED HOWEVER  THAT  IN  SUCH  CASE,  ANY  PAYOUT
AMOUNTS  SHALL  BE  COUNTED  AS INCOME FOR PURPOSES OF THE INCOME CALCU-
LATION; AND (III) AN ANNUITY NOT IN PERMANENT PAYOUT  STATUS  FOR  THREE
YEARS PRIOR TO THE DATE AN INDIVIDUAL APPLIES TO BECOME A PARTICIPANT IN
THE COMPACT PROGRAM SHALL BE DEEMED A COUNTABLE ASSET.
  (B)  THE  VALUE  OF AN ASSET TRANSFERRED INTO AN IRREVOCABLE TRUST FOR
LESS THAN FULL CONSIDERATION WITHIN THREE YEARS PRIOR  TO  THE  DATE  OF
APPLICATION TO THE COMPACT PROGRAM SHALL BE DEEMED A COUNTABLE ASSET.
  (C)  PRE-PAID FUNERALS PURCHASED FOR ONESELF, A SPOUSE OR FOR CHILDREN
WITH DISABILITIES SHALL NOT BE INCLUDED AS A COUNTABLE  ASSET,  IF  MADE
PRIOR TO THE DATE ON WHICH THE PARTICIPANT FULFILLS THE PLEDGE AMOUNT.
  (D)  THE  VALUE OF ANY DEBTS, INCLUDING BUT NOT LIMITED TO OUTSTANDING
DEBT ON CREDIT CARDS, AUTO PAYMENTS,  MONTHLY  MORTGAGE  PAYMENTS,  HOME
EQUITY  LOANS, REVERSE MORTGAGES AND ANY OTHER SUCH SIMILAR DEBT INSTRU-
MENTS SHALL BE DEDUCTED WHEN CALCULATING THE TOTAL  VALUE  OF  COUNTABLE
ASSETS.

A. 5418                            13

  (E)  THE  PRINCIPAL  AMOUNT  OF A MORTGAGE ON A HOMESTEAD SHALL NOT BE
DEDUCTED IF THE HOMESTEAD IS NOT  DEEMED  A  COUNTABLE  ASSET,  PROVIDED
HOWEVER  THAT  PAYMENTS  MADE  TO  REDUCE OR ELIMINATE ANY SUCH MORTGAGE
SHALL BE DEDUCTED WHEN CALCULATING THE TOTAL VALUE OF COUNTABLE  ASSETS.
IF  THE  HOMESTEAD  IS DEEMED A COUNTABLE ASSET, THE PRINCIPAL AMOUNT OF
THE MORTGAGE SHALL BE DEDUCTED  WHEN  CALCULATING  THE  TOTAL  VALUE  OF
COUNTABLE ASSETS.
  (F)  IN  ADDITION TO THE FOREGOING, THE FOLLOWING SHALL NOT BE CONSID-
ERED AS INCOME OR ASSETS:
  (I) ANY GIFT OR GIFTS MADE BY AN INDIVIDUAL OR AN INDIVIDUAL'S  SPOUSE
THAT  TOTAL  LESS THAN TWELVE THOUSAND DOLLARS IN ANY CALENDAR YEAR. THE
COMMISSIONER SHALL ANNUALLY ADJUST SUCH AMOUNT BY THE SAME PERCENTAGE AS
THE PERCENTAGE INCREASE IN THE FEDERAL CONSUMER PRICE INDEX;
  (II) EXPENDITURES TO AN EDUCATIONAL INSTITUTION OR MEDICAL FACILITY ON
BEHALF OF A SPOUSE OR  CHILD,  PROVIDED  HOWEVER  THAT  THESE  SHALL  BE
REASONABLE  EXPENDITURES  FOR THE PURPOSE OF MEDICAL TREATMENT OR EDUCA-
TION;
  (III) GIFTS THAT QUALIFY AS A CHARITABLE DEDUCTION ON THE INDIVIDUAL'S
FEDERAL INCOME TAX RETURN; AND
  (IV) THE AMOUNT RECEIVED FROM A REVERSE MORTGAGE  IF  EXPENDED  WITHIN
THIRTY  DAYS  OF  THE  TIME  IN WHICH RECEIVED. AN AMOUNT FROM A REVERSE
MORTGAGE THAT IS HELD FOR LONGER THAN SUCH THIRTY DAY  PERIOD  SHALL  BE
CONSIDERED  AS  COUNTABLE  INCOME,  UNLESS USED FOR THE PURCHASE OF LONG
TERM CARE SERVICES AS DEFINED IN THIS TITLE.
  THE COMMISSIONER, AFTER CONSULTING WITH THE ADVISORY COMMITTEE,  SHALL
ESTABLISH  CRITERIA  TO  DETERMINE  WHETHER  EXPENDITURES AND GIFTS MADE
PURSUANT TO THIS SUBDIVISION ARE DISALLOWABLE TRANSACTIONS.
  S 274. SPECIAL PROVISIONS REGARDING SPOUSES.  1. THE  REQUIREMENTS  OF
THIS  TITLE  CONCERNING DISCLOSURE OF ASSETS SHALL BE DEEMED TO MEAN AND
INCLUDE DISCLOSURE OF ALL ASSETS, INCLUDING ALL ASSETS OF SPOUSES, WITH-
OUT DISTINCTION AS TO OWNERSHIP BY OR BETWEEN  SPOUSES.  NOTWITHSTANDING
THE  FOREGOING,  IF  THERE IS A PRE- OR POST-NUPTIAL AGREEMENT WHICH HAS
BEEN EFFECTIVE THREE OR MORE YEARS PRIOR TO THE DATE  OF  ENROLLMENT  IN
THE  COMPACT PROGRAM, THE VALUE OF THE ASSETS OF THE SPOUSE NOT ENROLLED
IN THE COMPACT SHALL NOT BE DEEMED  A  COUNTABLE  ASSET  AND  SHALL  NOT
REQUIRE DISCLOSURE TO THE COMMISSIONER OR PROGRAM MANAGEMENT ENTITY.
  2.  IF  ONE  SPOUSE  ENROLLS IN THE COMPACT PROGRAM AND THE OTHER DOES
NOT, AND
  (A) THE ENROLLING SPOUSE BECOMES A BENEFICIARY AFTER MEETING THE MAXI-
MUM PLEDGE AMOUNT, THE COUPLE'S ASSETS SHALL BE  EXEMPT  FROM  CONSIDER-
ATION AS A COUNTABLE ASSET.
  (B)  THE  ENROLLING  SPOUSE  BECOMES  A  PARTICIPANT PLEDGING A DOLLAR
PLEDGE AMOUNT, ONE-HALF OF THE TOTAL VALUE OF THE SPOUSES' ASSETS  SHALL
BE  EXCLUDED  FROM  CONSIDERATION  AS A COUNTABLE ASSET BEFORE ANY OTHER
CALCULATIONS AS TO THE AMOUNT REQUIRED TO MEET A DOLLAR PLEDGE AMOUNT.
  (C) THE NON-ENROLLING SPOUSE SUBSEQUENTLY APPLIES TO BECOME A  PARTIC-
IPANT  IN  THE  COMPACT,  SUCH  INDIVIDUAL MAY PLEDGE EITHER THE MAXIMUM
PLEDGE AMOUNT OR THE DOLLAR PLEDGE AMOUNT. FOR PURPOSES  OF  DETERMINING
THE  DOLLAR  PLEDGE  AMOUNT  IN  SUCH CASE, THE COUNTABLE ASSETS OF SUCH
INDIVIDUAL SHALL MEAN, BEFORE ANY OTHER CALCULATIONS AS  TO  THE  AMOUNT
REQUIRED  TO  MEET  A  DOLLAR  PLEDGE  AMOUNT,  AN AMOUNT EQUAL TO FIFTY
PERCENT OF THE REMAINING ASSETS OF THE SPOUSES  LESS  ANY  AMOUNT  STILL
REQUIRED TO MEET THE PLEDGE AMOUNT OF THE INITIAL ENROLLING SPOUSE.
  3.  A  TRANSFER OR BEQUEST OF A PROTECTED AMOUNT SHALL NOT BE DEEMED A
COUNTABLE ASSET OF THE NON-ENROLLING SPOUSE, NOR SHALL INCOME OR  GROWTH
ON  SUCH INCOME BE COUNTED IF SUCH INCOME WAS PART OF A PROTECTED AMOUNT

A. 5418                            14

AND HAS BEEN KEPT IN A SEPARATE ACCOUNT. FOR PURPOSES OF THIS SECTION, A
PROTECTED AMOUNT IS THE AMOUNT REMAINING AFTER A PLEDGE HAS BEEN MET.
  4. A SURVIVING SPOUSE WHO APPLIES TO BECOME A PARTICIPANT, OR WHO IS A
PARTICIPANT  OR BENEFICIARY IN THE COMPACT PROGRAM SHALL NOT BE REQUIRED
TO EXERCISE A RIGHT OF ELECTION UNDER SECTION 5-1.1-A  OF  THE  ESTATES,
POWERS AND TRUSTS LAW.
  S  275.  QUALIFIED  LONG TERM CARE SAVINGS ACCOUNT.  AN INDIVIDUAL WHO
HAS BEEN REFUSED COVERAGE FOR LONG TERM CARE INSURANCE MAY  ESTABLISH  A
QUALIFIED LONG TERM CARE SAVINGS ACCOUNT, SUBJECT TO THE REQUIREMENTS OF
THIS SECTION. SUCH INDIVIDUAL SHALL BE THE OWNER OF SUCH ACCOUNT.
  1.  A  QUALIFIED  LONG  TERM CARE SAVINGS ACCOUNT IS A SAVINGS ACCOUNT
APPROVED BY THE COMMISSIONER FOR AN INDIVIDUAL WHO HAS BEEN  SUBJECT  TO
DENIAL  OF  LONG  TERM  CARE  INSURANCE COVERAGE. AS USED IN THIS TITLE,
"DENIAL OF LONG TERM CARE INSURANCE COVERAGE" SHALL MEAN THAT:
  (A) THE INDIVIDUAL HAS APPLIED FOR AND  BEEN  DENIED  COVERAGE  BY  AT
LEAST TWO LONG TERM CARE INSURANCE PLANS WHICH HAVE BEEN APPROVED BY THE
SUPERINTENDENT OF INSURANCE FOR OPERATION IN THIS STATE, OR
  (B) THE INDIVIDUAL HAS BEEN CERTIFIED BY A PHYSICIAN TO BE UNINSURABLE
FOR  LONG  TERM CARE INSURANCE COVERAGE BY REASON OF HAVING A CONDITION,
DISEASE OR DISABILITY THAT PRECLUDES ANY CONSIDERATION FOR  ISSUANCE  OF
LONG TERM CARE INSURANCE COVERAGE.
  THE  COMMISSIONER,  AFTER CONSULTATION WITH AND UPON RECOMMENDATION BY
THE ADVISORY COMMITTEE, SHALL ESTABLISH AND  MAINTAIN  A  LIST  OF  SUCH
DISQUALIFYING CONDITIONS, DISEASES AND DISABILITIES. AN INDIVIDUAL SHALL
PROVIDE  PROOF  OF  DENIAL  OF LONG TERM CARE INSURANCE COVERAGE OR SUCH
CERTIFICATION FROM A PHYSICIAN IN A FORM AND MANNER SATISFACTORY TO  THE
COMMISSIONER.
  2.  THE OWNER OF SUCH ACCOUNT MAY ANNUALLY CONTRIBUTE OR HAVE CONTRIB-
UTED ON HIS OR HER BEHALF AN AMOUNT OF UP TO TEN THOUSAND DOLLARS  TO  A
QUALIFIED   LONG   TERM   CARE  SAVINGS  ACCOUNT.  PURSUANT  TO  SECTION
TWENTY-EIGHT-A OF THE TAX LAW, SUCH AMOUNT SHALL BE  ANNUALLY  INCREASED
BY  THE  COMMISSIONER  OF TAXATION AND FINANCE BY THE SAME PERCENTAGE AS
THE PERCENTAGE INCREASE IN THE FEDERAL CONSUMER PRICE INDEX.
  3. ANY INDIVIDUAL WHO  CONTRIBUTES  TO  A  QUALIFIED  LONG  TERM  CARE
SAVINGS ACCOUNT, IRRESPECTIVE OF WHETHER SUCH INDIVIDUAL IS THE OWNER OF
SUCH  ACCOUNT,  SHALL  BE ELIGIBLE FOR THE LONG-TERM CARE SAVINGS CREDIT
PURSUANT TO SECTION SIX HUNDRED SIX OF THE TAX LAW.
  4. THE PROCEEDS OF A QUALIFIED LONG TERM CARE SAVINGS ACCOUNT  MAY  BE
USED  TO PAY FOR ANY LONG TERM CARE SERVICES NEEDS PERMITTED PURSUANT TO
THIS TITLE IN FULFILLMENT OF A PLEDGE BY  THE  OWNER  OF  SUCH  ACCOUNT.
DISTRIBUTIONS  FROM  THE QUALIFIED LONG TERM CARE SAVINGS ACCOUNT TO PAY
FOR SERVICES OR ITEMS NOT PERMITTED PURSUANT  TO  THIS  TITLE  SHALL  BE
SUBJECT  TO  A PENALTY OF TEN PERCENT OF EVERY DOLLAR SO EXPENDED DURING
THE LIFETIME OF THE OWNER OF SUCH ACCOUNT, IRRESPECTIVE OF WHETHER  SUCH
OWNER  IS  A  PARTICIPANT OR BENEFICIARY.   SUCH PENALTY SHALL BE LEVIED
ONLY AGAINST THE OWNER OF SUCH ACCOUNT.
  5. ANY OTHER PROVISION OF  LAW  OR  OF  THIS  TITLE  TO  THE  CONTRARY
NOTWITHSTANDING,  THE  AMOUNTS  IN  A  QUALIFIED  LONG TERM CARE SAVINGS
ACCOUNT SHALL NOT BE DEEMED A COUNTABLE ASSET PURSUANT TO THIS TITLE  OF
THE OWNER OF SUCH ACCOUNT.
  6.  THE  COMMISSIONER, AFTER CONSULTATION WITH THE ADVISORY COMMITTEE,
SHALL ESTABLISH APPROPRIATE RULES AND QUALIFICATIONS FOR QUALIFIED  LONG
TERM CARE SAVINGS ACCOUNTS, INCLUDING BUT NOT LIMITED TO ELIGIBILITY AND
APPROVAL,  USE  OF  PROCEEDS, THE MANNER OF PROOF OF DENIAL OF LONG TERM
CARE INSURANCE COVERAGE AND THE MEANS BY WHICH THE OWNER OF SUCH ACCOUNT

A. 5418                            15

SHALL PLEDGE TO USE THE PROCEEDS OF A QUALIFIED LONG TERM  CARE  SAVINGS
ACCOUNT IN FULFILLMENT OF A PLEDGE.
  7.  ANY  OTHER  PROVISION  OF  LAW  OR  OF  THIS TITLE TO THE CONTRARY
NOTWITHSTANDING, THE PROVISIONS OF THIS SECTION SHALL NOT APPLY  IF  THE
DISTRIBUTION  FROM  THE  ACCOUNT IS MADE AFTER THE DEATH OF THE OWNER OF
SUCH ACCOUNT, PROVIDED HOWEVER THAT:
  (A) IF THE SURVIVING SPOUSE OF THE OWNER OF SUCH ACCOUNT OR  A  CHRON-
ICALLY  ILL INDIVIDUAL ACQUIRES SUCH OWNER'S INTEREST IN SUCH ACCOUNT BY
REASON OF BEING THE DESIGNATED BENEFICIARY OF SUCH ACCOUNT AT THE  DEATH
OF  SUCH  OWNER  OF  SUCH ACCOUNT, SUCH QUALIFIED LONG TERM CARE SAVINGS
ACCOUNT SHALL BE TREATED AS IF THE SPOUSE OR SUCH CHRONICALLY ILL  INDI-
VIDUAL WERE THE OWNER OF SUCH ACCOUNT;
  (B) IN A CASE IN WHICH, UPON THE DEATH OF THE OWNER OF SUCH ACCOUNT, A
PERSON  WHO  IS  NOT  THE SPOUSE OF THE BENEFICIARY OR WHO IS NOT CHRON-
ICALLY ILL ACQUIRES THE INTEREST OF THE OWNER OF SUCH ACCOUNT IN A QUAL-
IFIED LONG TERM CARE SAVINGS ACCOUNT, SUCH ACCOUNT SHALL CEASE TO  BE  A
QUALIFIED  LONG TERM CARE SAVINGS ACCOUNT AS OF THE DATE OF THE DEATH OF
THE OWNER OF SUCH ACCOUNT, AND
  (I) IF SUCH PERSON IS NOT THE ESTATE OF SUCH  BENEFICIARY,  AN  AMOUNT
EQUAL  TO  THE  FAIR  MARKET VALUE OF THE ASSETS IN SUCH ACCOUNT ON SUCH
DATE SHALL BE INCLUDIBLE IN SUCH PERSON'S GROSS INCOME FOR  THE  TAXABLE
YEAR  WHICH  INCLUDES  SUCH  DATE, PROVIDED HOWEVER THAT SUCH INCLUDIBLE
AMOUNT SHALL BE REDUCED BY DISTRIBUTIONS  TO  PAY  FOR  LONG  TERM  CARE
SERVICES  PERMITTED  PURSUANT  TO  THIS TITLE WHICH WERE INCURRED BY THE
DECEDENT BEFORE THE DATE OF THE DECEDENT'S DEATH AND PAID BY SUCH PERSON
WITHIN ONE YEAR AFTER SUCH DATE, OR
  (II) IF SUCH PERSON IS THE ESTATE OF SUCH BENEFICIARY, AN AMOUNT EQUAL
TO THE FAIR MARKET VALUE OF THE ASSETS IN  SUCH  ACCOUNT  ON  SUCH  DATE
SHALL  BE  INCLUDIBLE  IN  SUCH  BENEFICIARY'S GROSS INCOME FOR THE LAST
TAXABLE YEAR OF SUCH BENEFICIARY, PROVIDED HOWEVER THAT SUCH FAIR MARKET
VALUE SHALL BE REDUCED BY  DISTRIBUTIONS  TO  PAY  FOR  LONG  TERM  CARE
SERVICES  PERMITTED  PURSUANT  TO  THIS TITLE WHICH WERE INCURRED BY THE
DECEDENT BEFORE THE DATE OF THE DECEDENT'S DEATH AND PAID BY SUCH PERSON
WITHIN ONE YEAR AFTER SUCH DATE; AND
  (C) THE TRANSFER OF THE INTEREST OF THE OWNER OF SUCH ACCOUNT TO  SUCH
OWNER'S SPOUSE OR FORMER SPOUSE UNDER A DIVORCE OR SEPARATION INSTRUMENT
SHALL  NOT  BE  CONSIDERED A TAXABLE TRANSFER MADE BY SUCH OWNER OF SUCH
ACCOUNT NOTWITHSTANDING ANY OTHER PROVISION OF LAW OR OF THIS TITLE, AND
SUCH INTEREST SHALL, AFTER SUCH TRANSFER, BE TREATED AS A QUALIFIED LONG
TERM CARE SAVINGS ACCOUNT WITH RESPECT TO WHICH SUCH SPOUSE IS THE OWNER
OF SUCH ACCOUNT.
  S 276. ADVISORY COMMITTEE. 1.  THE  COMMISSIONER  SHALL  ESTABLISH  AN
ADVISORY  COMMITTEE  TO  THE COMPACT PROGRAM, CONSISTING OF NINE PERSONS
APPOINTED BY THE COMMISSIONER AS FOLLOWS: TWO FROM THE ELDER LAW SECTION
OF THE NEW YORK STATE BAR ASSOCIATION  TO  INCLUDE  THE  CHAIR  OF  SUCH
SECTION OR A DESIGNEE APPOINTED BY THE CHAIR WHO SHALL SERVE EX OFFICIO;
TWO  FROM  STATEWIDE  ADVOCACY  GROUPS  PRIMARILY  CONCERNED WITH SENIOR
ISSUES; TWO FROM  PROVIDERS  OF  SERVICES,  INCLUDING  ONE  REPRESENTING
INSTITUTIONAL  PROVIDERS  OF  SERVICES AND ONE REPRESENTING NON-INSTITU-
TIONAL PROVIDERS; TWO FROM INSURERS SELLING LONG TERM CARE INSURANCE  IN
THE  STATE  WHO  SHALL BE PERSONS WITH AT LEAST FIVE YEARS EXPERIENCE IN
THE DEVELOPMENT OF LONG TERM CARE INSURANCE PRODUCTS AND WHO ARE OR  WHO
SHALL HAVE BEEN, SO FAR AS SHALL BE PRACTICABLE, IN EXECUTIVE POSITIONS;
AND  ONE WITH AT LEAST FIVE YEARS ACTUARIAL EXPERIENCE IN LONG TERM CARE
INSURANCE MATTERS. MEMBERS  SHALL  RECEIVE  NO  COMPENSATION  FOR  THEIR

A. 5418                            16

SERVICES,  BUT  SHALL  BE  ALLOWED  THEIR  ACTUAL AND NECESSARY EXPENSES
INCURRED IN PERFORMANCE OF THEIR DUTIES PURSUANT TO THIS TITLE.
  2.  THE PURPOSE OF SUCH ADVISORY COMMITTEE SHALL BE TO PROVIDE ADVICE,
CONSULTATION AND  RECOMMENDATIONS  ON  SPECIFIC  ISSUES  CONCERNING  THE
COMPACT PROGRAM AND ON THE FURTHER DEVELOPMENT OF THE PROGRAM, INCLUDING
BUT  NOT  LIMITED  TO  SUCH ISSUES AS THE DEFINITION OF HARDSHIP AND THE
TREATMENT OF PERSONS EXPERIENCING HARDSHIP UNDER THE COMPACT, THE TREAT-
MENT OF ASSETS OF PERSONS WHO ARE LIVING SEPARATELY  BUT  NOT  DIVORCED,
LOSS  OF  INCOME  OR  ASSETS  AFTER A PARTICIPANT HAS AGREED TO A PLEDGE
AMOUNT, SPOUSAL PROTECTIONS, ESTABLISHMENT AND USE  OF  LONG  TERM  CARE
SAVINGS  ACCOUNTS,  AND  ANY  OTHER ISSUES WHICH THE COMMISSIONER OR THE
ADVISORY COMMITTEE SHALL DEEM NECESSARY OR APPROPRIATE TO THE  OPERATION
OF  THE  COMPACT.    THE  ADVISORY COMMITTEE SHALL ADDITIONALLY CONSIDER
ISSUES RELATED TO CONTINUITY OF CARE BY PROVIDERS AND ANY ISSUES RELATED
TO SHIFTING OR FAILING TO PROVIDE SERVICES OR DROPPING PARTICIPANTS FROM
COVERAGE WHEN THEY BECOME BENEFICIARIES.   IN  PROMULGATING  REGULATIONS
PURSUANT  TO  THIS  TITLE,  THE  COMMISSIONER SHALL CONSULT THE ADVISORY
COMMITTEE, PROVIDED HOWEVER THAT FAILURE TO RESPOND TIMELY BY THE  ADVI-
SORY  COMMITTEE SHALL NOT BE DEEMED A DEFECT IN THE PROMULGATION OF SUCH
REGULATIONS.  THE ADVISORY COMMITTEE MAY REQUEST AND SHALL RECEIVE  FROM
THE  COMMISSIONER  SUCH  DATA AND ANALYSIS, OR MAY MAKE SUCH ANALYSIS OF
SUCH DATA, AS SHALL ENABLE IT TO FULFILL ITS MISSION  PURSUANT  TO  THIS
TITLE.
  3.  THE  COMMITTEE SHALL ANNUALLY OR MORE OFTEN IF THE COMMITTEE SHALL
SO DECIDE REVIEW THE METHODOLOGY FOR SETTING THE AMOUNT OF  THE  COMPACT
SUBSIDY  AND SHALL MAKE SUCH RECOMMENDATIONS FOR CHANGE AS IT SHALL DEEM
APPROPRIATE AND IN KEEPING WITH THE SPIRIT AND INTENT OF THIS  TITLE  TO
THE COMMISSIONER.
  4.  THE  COMMITTEE SHALL ANNUALLY OR MORE OFTEN IF THE COMMITTEE SHALL
SO DECIDE REVIEW THE CONDUCT OF PROVIDERS OF SERVICE TO PARTICIPANTS AND
BENEFICIARIES AND MAY RECOMMEND TO THE COMMISSIONER THE ESTABLISHMENT OF
REQUIREMENTS CONCERNING SUCH CONDUCT TO PREVENT ABUSES. IF THE COMMITTEE
SHALL MAKE SUCH RECOMMENDATION, THE COMMISSIONER IS HEREBY AUTHORIZED TO
AND SHALL PRESCRIBE SUCH REQUIREMENTS BY RULE AND REGULATION.
  5. IN ADDITION TO  THE  ADVISORY  COMMITTEE,  THE  COMMISSIONER  SHALL
ESTABLISH  A  TEN  MEMBER  CONSUMER  ISSUES AND INTEGRITY COMMITTEE, THE
PURPOSE OF WHICH SHALL BE TO EXAMINE THE IMPLEMENTATION  AND  EFFECTIVE-
NESS  OF  THE  COMPACT  WITH  RESPECT TO CONSUMER ISSUES. MEMBERS OF THE
COMMITTEE SHALL INCLUDE PERSONS WITH  DISABILITIES,  SENIORS,  ADVOCATES
FOR  PERSONS  WITH  DISABILITIES  AND  SENIORS, AND INDIVIDUALS FROM THE
ACADEMIC COMMUNITY WITH EXPERTISE IN LONG TERM CARE POLICY, HEALTH POLI-
CY AND SOCIAL POLICY. THE COMMITTEE SHALL ADDRESS ISSUES REFERRED TO  IT
BY  THE  COMMISSIONER  OR  BY  THE ADVISORY COMMITTEE, AND MAY ENGAGE IN
STUDIES OF ISSUES AT ITS OWN DISCRETION. THE CONSUMER ISSUES AND  INTEG-
RITY  COMMITTEE  SHALL  MEET IN A PUBLIC SETTING AT LEAST FOUR TIMES PER
YEAR AND AT SUCH OTHER TIMES AS THE COMMISSIONER OR  THE  CHAIR  OF  THE
COMMITTEE SHALL DEEM APPROPRIATE.
  S  277. REQUIREMENT FOR CONFIDENTIALITY.  EXCEPT AS OTHERWISE PROVIDED
IN THIS SECTION, ALL INFORMATION GATHERED  FROM  AN  INDIVIDUAL  SEEKING
ENROLLMENT  IN  THE  COMPACT  PROGRAM  SHALL  BE  CONFIDENTIAL, WITH THE
FOLLOWING EXCEPTIONS:
  1. REQUESTS FOR INFORMATION BASED  UPON  LEGITIMATE  CRIMINAL  JUSTICE
PURPOSES, AS SUCH TERM SHALL BE DEFINED IN REGULATION BY THE COMMISSION-
ER;
  2.  JUDICIAL SUBPOENAS;

A. 5418                            17

  3.  REQUESTS  FOR  INFORMATION BY THE VICTIM OR CLAIMANT OR HIS OR HER
AUTHORIZED REPRESENTATIVE; AND
  4.  FOR  PURPOSES  NECESSARY AND PROPER FOR THE ADMINISTRATION OF THIS
TITLE.
  ANY PERSON WHO KNOWINGLY AND INTENTIONALLY PERMITS THE RELEASE OF  ANY
SUCH DATA AND INFORMATION NOT PERMITTED BY THIS TITLE SHALL BE GUILTY OF
A CLASS A MISDEMEANOR. THE COMMISSIONER SHALL PROMULGATE RULES AND REGU-
LATIONS  INSURING  THE  TIMELINESS,  COMPLETENESS,  CONFIDENTIALITY  AND
DISPOSITION OF SUCH DATA AND INFORMATION.
  S 278. EDUCATION AND INFORMATION.  THE PROGRAM MANAGEMENT  ENTITY,  IN
CONSULTATION  WITH THE SUPERINTENDENT OF INSURANCE, THE DIRECTOR AND THE
COMMISSIONER, IS HEREBY AUTHORIZED AND DIRECTED, WITHIN  AMOUNTS  APPRO-
PRIATED  THEREFOR,  TO  ESTABLISH  AN  EDUCATION  AND  OUTREACH  PROGRAM
CONCERNING THE COMPACT PROGRAM  OR  TO  COORDINATE  SUCH  EDUCATION  AND
OUTREACH  PROGRAM  WITH  ANY  SIMILAR PUBLICLY SPONSORED PROGRAM FOR THE
PURPOSE OF INFORMING AND EDUCATING THE GENERAL PUBLIC OF THE AVAILABILI-
TY AND ADVANTAGES OF THE COMPACT PROGRAM  BY  MEANS  INCLUDING  BUT  NOT
LIMITED  TO  THE FOLLOWING:   EDUCATIONAL AND INFORMATIONAL MATERIALS IN
PRINT,  AUDIO,  VISUAL,  ELECTRONIC  OR  OTHER  MEDIA;  PUBLIC   SERVICE
ANNOUNCEMENTS,  ADVERTISEMENTS,  MEDIA  CAMPAIGNS, WORKSHOPS, MASS MAIL-
INGS, CONFERENCES OR PRESENTATIONS; ESTABLISHMENT OF A  TOLL-FREE  TELE-
PHONE  HOTLINE AND ELECTRONIC SERVICES TO PROVIDE INFORMATION; AND MEET-
INGS  CONDUCTED  BY  ARRANGEMENT  WITH  THE  COMMISSIONER  WITH   ESTATE
PLANNERS,  ELDER  LAW  ATTORNEYS AND OTHER PROFESSIONALS CONCERNING LONG
TERM CARE INSURANCE, INCLUDING  THOSE  POLICIES  AVAILABLE  THROUGH  THE
PARTNERSHIP  FOR  LONG TERM CARE PROGRAM. IN EXERCISING ANY POWERS UNDER
THIS SECTION, THE PROGRAM DIRECTOR MAY CONSULT  WITH  APPROPRIATE  AGEN-
CIES, ORGANIZATIONS, CONSUMERS AND PROVIDERS OF LONG TERM CARE INSURANCE
OR ORGANIZATIONS REPRESENTING THEM. IN ADDITION TO STATE FUNDS APPROPRI-
ATED  FOR  PROGRAMS  UNDER THIS SECTION, THE DIRECTOR MAY ACCEPT FUNDING
FROM PUBLIC SOURCES FOR PROGRAMS UNDER THIS SECTION  AND  MAY  UNDERTAKE
JOINT  OR  COOPERATIVE  PROGRAMS  WITH  OTHER PUBLIC AGENCIES OR PRIVATE
NOT-FOR-PROFIT CORPORATIONS WHICH ARE NEITHER PROVIDERS  NOR  REGULATORS
OF  LONG  TERM CARE INSURANCE OR AFFILIATES OR UNITS OF SUCH AGENCIES OR
CORPORATIONS.
  S 2.  Section 606 of the tax law is amended by adding a new subsection
(qq) to read as follows:
  (QQ) LONG-TERM CARE SAVINGS CREDIT. (1) RESIDENTS. A TAXPAYER SHALL BE
ALLOWED A CREDIT AGAINST THE TAX IMPOSED BY THIS ARTICLE  EQUAL  TO  THE
LESSER  OF  ONE  THOUSAND  FIVE HUNDRED DOLLARS OR TWENTY PERCENT OF THE
AMOUNT  CONTRIBUTED TO A QUALIFIED LONG TERM CARE SAVINGS ACCOUNT ESTAB-
LISHED PURSUANT TO TITLE FIVE OF ARTICLE TWO OF THE ELDER LAW.
  IF THE AMOUNT OF THE CREDIT ALLOWABLE UNDER THIS  SUBSECTION  FOR  ANY
TAXABLE  YEAR  SHALL EXCEED THE TAXPAYER'S TAX FOR SUCH YEAR, THE EXCESS
MAY BE CARRIED OVER TO THE FOLLOWING YEAR OR YEARS AND MAY  BE  DEDUCTED
FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS.
  (2) NONRESIDENTS AND PART-YEAR RESIDENTS. IN THE CASE OF A NONRESIDENT
TAXPAYER  OR  A PART-YEAR RESIDENT TAXPAYER, THE CREDIT DETERMINED UNDER
THIS SUBSECTION SHALL BE LIMITED TO THE AMOUNT DETERMINED BY MULTIPLYING
THE AMOUNT OF SUCH CREDIT BY THE NEW YORK SOURCE FRACTION AS  SET  FORTH
IN  PARAGRAPH THREE OF SUBSECTION (E) OF SECTION SIX HUNDRED ONE OF THIS
PART. THE CREDIT AS SO LIMITED SHALL BE APPLIED AS PROVIDED IN PARAGRAPH
ONE OF THIS SUBSECTION.
  S 3. The tax law is amended by adding a new section 28-a  to  read  as
follows:

A. 5418                            18

  S 28-A.  RULES CONCERNING QUALIFIED LONG TERM CARE SAVINGS ACCOUNTS. A
TAXPAYER MAY ESTABLISH A QUALIFIED LONG TERM CARE SAVINGS ACCOUNT PURSU-
ANT TO TITLE FIVE OF ARTICLE TWO OF THE ELDER LAW. A TAXPAYER WHO ESTAB-
LISHES  SUCH  ACCOUNT SHALL BE THE OWNER OF SUCH ACCOUNT. A TAXPAYER MAY
NOT  OWN  MORE   THAN ONE SUCH ACCOUNT. SUCH ACCOUNT SHALL BE SUBJECT TO
THE FOLLOWING RULES:
  1. A QUALIFIED LONG TERM CARE SAVINGS ACCOUNT SHALL  BE  ELIGIBLE  FOR
CREDITS    PURSUANT  TO SECTION SIX HUNDRED SIX OF THIS CHAPTER, AND ANY
INDIVIDUAL WHO  CONTRIBUTES  TO  A  QUALIFIED  LONG  TERM  CARE  SAVINGS
ACCOUNT,  IRRESPECTIVE  OF  WHETHER SUCH INDIVIDUAL IS THE OWNER OF SUCH
ACCOUNT, SHALL BE ELIGIBLE FOR SUCH CREDITS.
  2. ANY OTHER PROVISION OF LAW TO  THE  CONTRARY  NOTWITHSTANDING,  THE
PROVISIONS  OF  THIS  SECTION  RELATING  TO  CREDITS,  CONTRIBUTIONS  OR
DISTRIBUTIONS  FROM SUCH LONG TERM CARE SAVINGS ACCOUNTS SHALL NOT APPLY
IF THE DISTRIBUTION FROM THE ACCOUNT IS MADE  AFTER  THE  DEATH  OF  THE
OWNER OF SUCH ACCOUNT,  PROVIDED HOWEVER THAT:
  (A)  IF THE SURVIVING SPOUSE OF THE OWNER OF SUCH ACCOUNT, OR A CHRON-
ICALLY ILL INDIVIDUAL AS PROVIDED BY TITLE FIVE OF ARTICLE  TWO  OF  THE
ELDER  LAW, ACQUIRES  SUCH OWNER'S INTEREST IN SUCH ACCOUNT BY REASON OF
BEING THE DESIGNATED BENEFICIARY OF SUCH ACCOUNT AT THE  DEATH  OF  SUCH
OWNER  OF  SUCH  ACCOUNT,  SUCH QUALIFIED LONG TERM CARE SAVINGS ACCOUNT
SHALL BE TREATED AS IF THE  SPOUSE OR SUCH  CHRONICALLY  ILL  INDIVIDUAL
WERE THE OWNER OF SUCH ACCOUNT.  SUCH SPOUSE MAY USE THE PROCEEDS OF THE
ACCOUNT WITHOUT PENALTY.
  (B) IN A CASE IN WHICH, UPON THE DEATH OF THE OWNER OF SUCH ACCOUNT, A
PERSON  WHO  IS  NOT  THE SPOUSE OF THE BENEFICIARY OR WHO IS NOT CHRON-
ICALLY ILL ACQUIRES THE INTEREST OF THE OWNER OF SUCH ACCOUNT IN A QUAL-
IFIED LONG TERM CARE SAVINGS ACCOUNT, SUCH ACCOUNT SHALL CEASE TO  BE  A
QUALIFIED LONG TERM  CARE SAVINGS ACCOUNT AS OF THE DATE OF THE DEATH OF
THE OWNER OF SUCH  ACCOUNT, AND
  (I) IF SUCH PERSON IS NOT THE ESTATE OF SUCH BENEFICIARY, THE VALUE OF
THE  ASSETS  IN  SUCH  ACCOUNT  ON SUCH DATE SHALL BE INCLUDIBLE IN SUCH
PERSON'S GROSS  INCOME FOR THE TAXABLE YEAR WHICH  INCLUDES  SUCH  DATE,
PROVIDED  HOWEVER  THAT  SUCH  INCLUDIBLE  AMOUNT  SHALL  BE  REDUCED BY
DISTRIBUTIONS TO PAY FOR LONG TERM CARE SERVICES PERMITTED  PURSUANT  TO
THIS  SECTION WHICH WERE INCURRED BY THE DECEDENT BEFORE THE DATE OF THE
DECEDENT'S DEATH AND PAID BY SUCH PERSON  WITHIN  ONE  YEAR  AFTER  SUCH
DATE, OR
  (II)  IF  SUCH  PERSON IS THE ESTATE OF SUCH BENEFICIARY, THE VALUE OF
THE ASSETS IN SUCH ACCOUNT ON SUCH DATE  SHALL  BE  INCLUDIBLE  IN  SUCH
BENEFICIARY'S  GROSS  INCOME FOR THE LAST TAXABLE YEAR OF SUCH BENEFICI-
ARY, PROVIDED HOWEVER THAT SUCH VALUE SHALL BE REDUCED BY  DISTRIBUTIONS
TO  PAY  FOR LONG TERM CARE  SERVICES PERMITTED PURSUANT TO THIS SECTION
WHICH WERE INCURRED BY THE DECEDENT BEFORE THE DATE  OF  THE  DECEDENT'S
DEATH AND PAID BY SUCH PERSON WITHIN ONE YEAR AFTER SUCH DATE.
  (C)  THE TRANSFER OF THE INTEREST OF THE OWNER OF SUCH ACCOUNT TO SUCH
OWNER'S  SPOUSE OR FORMER SPOUSE UNDER A DIVORCE OR  SEPARATION  INSTRU-
MENT  SHALL  NOT  BE CONSIDERED A TAXABLE TRANSFER MADE BY SUCH OWNER OF
SUCH ACCOUNT   NOTWITHSTANDING ANY OTHER PROVISION OF  LAW  OR  OF  THIS
ARTICLE,  AND SUCH  INTEREST SHALL, AFTER SUCH TRANSFER, BE TREATED AS A
QUALIFIED LONG TERM CARE   SAVINGS ACCOUNT WITH RESPECT  TO  WHICH  SUCH
SPOUSE IS THE OWNER OF SUCH ACCOUNT.
  S  4.  Severability.    If any clause, sentence, paragraph, section or
part of this act shall be adjudged by any court of  competent  jurisdic-
tion to be invalid, such judgment shall not affect, impair or invalidate
the  remainder  thereof,  but  shall be confined in its operation to the

A. 5418                            19

clause, sentence, paragraph, section or part thereof  directly  involved
in the controversy in which such judgment shall have been rendered.
  S  5.  This  act shall take effect on the ninetieth day after it shall
have become a law.