PRINTER'S NO. 198
No. 179 Session of 1989
INTRODUCED BY REINARD, MAIALE, HOWLETT, GEIST, NOYE, HALUSKA, J. L. WRIGHT, CARLSON, SEMMEL, STAIRS, FOX, RAYMOND, BUNT, TRELLO, CORNELL, FLICK, VEON, LANGTRY, CAWLEY, RYBAK, VROON, GIGLIOTTI, CAPPABIANCA, RITTER, NAHILL, DORR, MORRIS, MICOZZIE AND E. Z. TAYLOR, JANUARY 31, 1989
REFERRED TO COMMITTEE ON HEALTH AND WELFARE, JANUARY 31, 1989
AN ACT 1 Establishing a community trust for persons with severe chronic 2 disabilities. 3 The General Assembly of the Commonwealth of Pennsylvania 4 hereby enacts as follows: 5 Section 1. Short title. 6 This act shall be known and may be cited as the Community 7 Trust Fund Act. 8 Section 2. Legislative intent. 9 (a) Findings.--The General Assembly finds that it is in the 10 public interest to encourage activities by voluntary 11 associations and private citizens which will supplement and 12 augment those services provided by Federal, State and local 13 government agencies in discharge of their responsibilities 14 toward individuals with severe chronic disabilities. The General 15 Assembly further finds that, as a result of changing social, 16 economic and demographic trends, families of persons with severe
1 chronic disabilities are increasingly aware of the need for a 2 means by which they can assure ongoing individualized personal 3 concern for severely disabled family members who may survive 4 parents or other family members and can provide for the 5 efficient management of small legacies or trust funds to be used 6 for the benefit of such disabled persons. The Community Trust 7 Fund will pool resources contributed by families or persons with 8 philanthropic intent and will reserve portions of these funds 9 for the use and benefit of designated beneficiaries. 10 (b) Liberal construction.--This act shall be liberally 11 construed and applied to promote its underlying purposes and 12 policies, which are, among others, to: 13 (1) encourage the orderly establishment of community 14 trusts for the benefit of persons with severe chronic 15 disabilities; 16 (2) ensure that community trusts are administered 17 properly and that the managing boards of the trusts are free 18 from conflicts of interest; 19 (3) facilitate sound administration of trust funds for 20 persons with severe chronic disabilities by allowing family 21 members and others to pool resources in order to make 22 professional management investment more efficient; 23 (4) provide parents of persons with severe chronic 24 disabilities peace of mind in knowing that a means exists to 25 ensure that the interests of their children who have severe 26 chronic disabilities are properly looked after and managed 27 after the parents die or become incapacitated; 28 (5) encourage the availability of private resources to 29 purchase for persons with severe chronic disabilities goods 30 and services that are not available through any governmental 19890H0179B0198 - 2 -
1 or charitable program and to conserve these resources by 2 limiting purchases to those which are not available from 3 other sources; 4 (6) encourage the inclusion, as beneficiaries of 5 community trusts, of persons who lack resources and whose 6 families are indigent, in a way that does not diminish the 7 resources available to other beneficiaries whose families 8 have contributed to the trust; and 9 (7) remove the disincentives which discourage parents 10 and others from setting aside funds for the future protection 11 of persons with severe chronic disabilities by ensuring that 12 the interest of beneficiaries in community trusts are not 13 considered assets or income which would disqualify them from 14 any governmental or charitable entitlement program with an 15 economic means test. 16 Section 3. Definitions. 17 The following words and phrases when used in this act shall 18 have the meanings given to them in this section unless the 19 context clearly indicates otherwise: 20 "Beneficiary." A person with a severe chronic disability who 21 has qualified as a member of the community trust program and who 22 has the right to receive the services and benefits of the 23 community trust program as provided in this act. 24 "Board." The board of trustees or the group of persons 25 vested with the management of the business and affairs of a 26 nonprofit corporation, formed for the purpose of managing a 27 community trust, irrespective of the name by which the group is 28 designated. 29 "Community trust." A nonprofit organization which offers the 30 following services: 19890H0179B0198 - 3 -
1 (1) Administration of special trust funds for persons 2 with severe chronic disabilities. 3 (2) Follow-up services. 4 (3) Advice and counsel to persons who have been 5 appointed as individual guardians of the persons or estates 6 of persons with severe chronic disabilities. 7 "Follow-up services." Services purchased or offered by 8 community trusts which are designed to insure that the needs of 9 each beneficiary are being met, for as long as may be required, 10 and may include periodic visits to the beneficiary and to the 11 places where the beneficiary receives services, participation in 12 the development of individualized plans being made by service 13 providers for the beneficiary and other similar services 14 consistent with the purposes of this act. 15 "Severe chronic disability." A physical or mental impairment 16 which is expected to give rise to a long-term need for 17 specialized health, social and other services, and which makes 18 the person with such a disability dependent upon others for 19 assistance. 20 "Surplus trust funds." Funds accumulated in the trust from 21 contributions made on behalf of an individual beneficiary which, 22 after the death of the beneficiary, are determined by the board 23 to be in excess of the actual cost of providing services during 24 the beneficiary's lifetime, including the beneficiary's share of 25 administrative costs. 26 "Trustee." A member of the board of a corporation, formed 27 for the purpose of managing a community trust, whether that 28 member is designated as a trustee, director, manager or 29 governor, or by any other title. 30 Section 4. Organization of community trust. 19890H0179B0198 - 4 -
1 (a) Administration.--Each community trust shall be 2 administered by a board of trustees, which shall be incorporated 3 as a nonprofit corporation. 4 (b) Board membership.--The board shall be comprised of at 5 least nine, but not more than 21 members, and at least one-third 6 of the members shall be parents or other relatives of a person 7 with severe chronic disabilities. Board members shall be 8 selected in a manner which gives geographic representation 9 throughout the area served by the board. 10 (c) Limitation on members.--No board member, other than 11 those who serve in an advisory capacity, may be a provider of 12 habilitative, health, social or educational services to persons 13 with severe chronic disabilities, nor may an employee of such a 14 provider serve as a board member. 15 (d) Compensation.--No board member may receive compensation 16 for services provided as a member of the board. No fees or 17 commissions may be paid to a board member. A board member may be 18 reimbursed for necessary expenses incurred as a board member 19 upon presentation of receipts. A board member may receive 20 indemnification. 21 Section 5. Powers and duties of board. 22 (a) Adoption of bylaws.--The board shall adopt bylaws and 23 shall file them with the Secretary of Public Welfare, in 24 addition to complying with the provisions of 15 Pa.C.S. Part III 25 (relating to corporations not-for-profit). The bylaws shall 26 include a declaration delineating the primary geographic area 27 served by the trust and the principal services which are 28 provided. 29 (b) Employment of staff.--The board may retain necessary 30 paid staff to provide follow-up services to the extent required 19890H0179B0198 - 5 -
1 by each beneficiary. 2 (c) Expenditure of moneys.-- 3 (1) The board may authorize the following expenditures: 4 (i) Payment for goods or services which, in the sole 5 discretion of the board, will promote the well-being of a 6 beneficiary of the trust. This shall include recreational 7 services. 8 (ii) Payment for burial of a beneficiary. 9 (iii) Payment for the reasonable costs of 10 administering the community trust. 11 (2) The board may not expend or authorize the 12 expenditure of funds for goods or services of comparable 13 quality to those available to a particular beneficiary 14 through a governmental or charitable program, through 15 insurance or through other sources. 16 (d) Acceptance of moneys.-- 17 (1) The board may accept contributions, bequests and 18 designations under life insurance policies to the community 19 trust on behalf of individuals with severe chronic 20 disabilities for the purpose of qualifying them as 21 beneficiaries of the trust. When a contribution, bequest or 22 assignment of insurance proceeds is made, the trustor shall 23 receive a written statement of the services to be provided to 24 the beneficiary. The statement shall include a starting date 25 for delivery of services or the condition precedent which 26 shall determine the starting date. The statement shall 27 describe the frequency with which services shall be provided, 28 the duration of provision and the criteria and procedure for 29 program modification which assure that services provided are 30 in the best interest of the beneficiary. 19890H0179B0198 - 6 -
1 (2) The board may accept gifts and use surplus trust 2 funds for the purpose of qualifying as a beneficiary an 3 indigent person whose family members lack the financial 4 resources to make a full contribution on that person's 5 behalf. The extent and character of the services and 6 selection of beneficiaries are at the discretion of the 7 board. The board may accept gifts to meet start-up costs, to 8 reduce the charges to the trust for the cost of 9 administration and for any other purpose consistent with this 10 act. Gifts made to the trust for an unspecified purpose shall 11 be used by the board either to qualify indigent persons whose 12 families lack the means to qualify them as beneficiaries of 13 the trust or to meet any start-up costs that the trust 14 incurs. The board may not use surplus trust funds to make a 15 charitable contribution on behalf of a beneficiary or a group 16 or class of beneficiaries. 17 (e) Preparation and filing of annual financial report.--In 18 addition to reports required to be filed under 15 Pa.C.S. Part 19 III, the board shall file an annual report with the Secretary of 20 Public Welfare along with an itemized statement which shows the 21 funds collected for the year, income earned, salaries paid, 22 other expenses incurred and the opening and final trust 23 balances. A copy of this statement shall be available to a 24 beneficiary, trustor or designee of the trustor, upon request. 25 (f) Preparation of annual beneficiary's report.--The board 26 shall prepare and provide each trustor or the trustor's designee 27 annually with a detailed individual statement of the services 28 provided to the trustor's beneficiary during the previous 12 29 months and of the services to be provided during the following 30 12 months. The board shall provide a copy of this statement to 19890H0179B0198 - 7 -
1 the beneficiary, upon request. 2 (g) Provision of services.-- 3 (1) The board may agree to fulfill any special requests 4 made on behalf of a beneficiary if the request is consistent 5 with this act and if an adequate contribution has been made 6 for this purpose on behalf of a beneficiary. 7 (2) The board may agree to serve as trustee for an 8 individual trust created on behalf of a beneficiary, 9 regardless of whether the trust is revocable or irrevocable, 10 has one or more remaindermen or contingent beneficiaries, or 11 any other condition, as long as the individual trust is 12 consistent with the purposes of this act. 13 (3) The board may offer consultative and professional 14 assistance to a guardian of a beneficiary of its trust. 15 (h) Limitations on provision of services.-- 16 (1) The board need not provide services to a beneficiary 17 who is a competent adult who refuses to accept the services. 18 (2) The board shall not provide services of a nature or 19 in a manner which is contrary to the public policy of the 20 Commonwealth at the time the services would be provided. 21 (i) Transmittal of trust moneys.--The board shall transmit 22 all moneys received by it as trustee to the State Treasurer, for 23 deposit receipts in the Community Trust Fund which shall be 24 maintained as a separate account. 25 Section 6. Community Trust Fund. 26 There is hereby created in the Office of State Treasurer the 27 Community Trust Fund. All moneys received from community trust 28 boards in this Commonwealth shall be deposited into this 29 account. Receipts shall be provided to a board at the time of 30 deposit. Quarterly accounting statements shall be provided to 19890H0179B0198 - 8 -
1 each board having moneys deposited in the fund. 2 Section 7. Irrevocable nature of trust. 3 A community trust for persons with severe chronic 4 disabilities is irrevocable, but the trustees in their sole 5 discretion may provide compensation for any contribution to the 6 trust to any trustor who, upon good cause, withdraws a 7 beneficiary designated by the trustor from the trust, or if it 8 becomes impossible to fulfill the conditions of the trust with 9 regard to an individual beneficiary for reasons other than the 10 death of the beneficiary. 11 Section 8. Effect of participation. 12 Notwithstanding any other provision of law to the contrary, 13 the beneficiary's interest in community trust shall not be 14 deemed to be an asset for the purpose of determining income 15 eligibility for a publicly operated program, nor shall that 16 interest be reached in satisfaction of a claim for support and 17 maintenance of the beneficiary. No agency shall reduce the 18 benefits of services available to an individual because that 19 person is the beneficiary of a community trust. 20 Section 9. Rule against perpetuities abrogated. 21 A community trust shall not be subject to or held to be in 22 violation of a principle of law against perpetuities or 23 restraints on alienation or perpetual accumulations of trusts. 24 Section 10. Settlement and dissolution. 25 The board shall settle a community trust by filing a final 26 accounting in the court of common pleas. In addition, at any 27 time prior to the settlement of the final account, the board, 28 the Secretary of Public Welfare or the Attorney General may 29 bring an action for the dissolution of a nonprofit corporation 30 in the court of common pleas for the purpose of terminating the 19890H0179B0198 - 9 -
1 trust or merging it with another charitable trust. No trustee or 2 any private individual shall be entitled to share in the 3 distribution of any of the trust assets upon dissolution, merger 4 or settlement of the community trust. Upon dissolution, merger 5 or settlement, the court of common pleas shall distribute all of 6 the remaining net assets of the community trust in a manner that 7 is consistent with the purposes of this act. 8 Section 11. Applicability. 9 This act shall apply to community trusts established on or 10 after the effective date of this act. 11 Section 12. Effective date. 12 This act shall take effect in 90 days. A17L67JAM/19890H0179B0198 - 10 -