PA 08-140—sHB 5845

Finance, Revenue and Bonding Committee

Government Administration and Elections Committee


SUMMARY: This act exempts dividends and capital gains earned on contributions to an account in the Homecare Option Program for the Elderly (HOPE) from the designated account beneficiary's state income tax. Interest earned on such contributions was already exempt.

It expands the specified people who can benefit from a HOPE account to include any designated beneficiary. Under prior law, only a person who entered into the HOPE participation agreement or who was later designated as that person's spouse or civil union partner could benefit.

Finally, the act adds certain requirements and stipulations concerning the status of the HOPE trust fund, its relationship to the state, and how deposits must be administered.

EFFECTIVE DATE: July 1, 2008. The tax exemption applies to tax years starting on or after January 1, 2008.


The act makes the HOPE trust fund an instrumentality of the state performing essential functions and makes the comptroller responsible for receiving, maintaining, administering, investing, and disbursing funds from it.

It requires the trust to receive and hold all deposits, gifts, bequests, endowments, government grants, and other funds, and the earnings on those funds, until disbursed to a designated beneficiary for qualified home care expenses. Depositors and beneficiaries cannot direct how their contributions are invested, but may choose specific investment options that the comptroller may establish within the trust.

HOPE deposits must be made in cash. Amounts deposited in individual HOPE accounts are not state property and cannot be combined with state funds. The state has no claim on, or interest in, the funds. Trust contracts and obligations are not state obligations and the state has no obligation to designated beneficiaries or others on account of the trust. Trust payment obligations are limited to amounts on deposit with the trust. Deposits can only be disbursed in accordance with the HOPE law. The trust continues as long as it has deposits or obligations and until terminated by law. Deposits not claimed when the trust terminates return to the state.


Homecare Option Program for the Elderly

HOPE allows participants to establish individual savings accounts within a state-administered trust fund. It allows an account's designated beneficiary to withdraw funds for qualified home care expenses that (1) are not covered by a long-term health insurance policy or supplement services covered by such a policy or by Medicare and (2) will allow the person to remain in his or her home or live in a non-institutional setting as he or she ages. HOPE is administered by the state comptroller.

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