REPORT TITLE:



DESCRIPTION:


 
a                                                     GOV-14(99)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        1315
THE SENATE                              S.B. NO.           
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO RECIPROCAL BENEFICIARIES.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  The purpose of this bill is to redefine
 
 2 reciprocal beneficiaries to be persons who are not related by
 
 3 blood and who cannot marry and to give couples who have
 
 4 established a reciprocal beneficiary relationship as provided by
 
 5 law most of the legal rights that accrue to married couples.
 
 6 Such things as adoption or other parental rights are excluded.
 
 7 Act 383, Session Laws of Hawaii 1997 allowed persons who could
 
 8 not legally be married to enter into a relationship as reciprocal
 
 9 beneficiaries and gave to such persons certain legal rights,
 
10 including rights to pensions, workers compensation benefits, and
 
11 insurance benefits.  Many of the laws that deal with married
 
12 couples, however, were not amended by Act 383 to include
 
13 reciprocal beneficiaries.  This bill would amend the Hawaii
 
14 Revised Statutes to treat reciprocal beneficiaries and married
 
15 persons as similarly as possible in both their rights and duties
 
16 under the law with certain limitations while reserving the
 
17 institution of marriage to a man and a woman.
 
18      SECTION 2.  Section 11-14.5, Hawaii Revised Statutes, is
 
19 amended by amending subsection (a) to read as follows:
 

 
a                                                     GOV-14(99)
Page 2                                                     1315
                                     S.B. NO.           
                                                        
                                                        

 
 1      "(a) If a life threatening circumstance exists to:
 
 2      (1)  A law enforcement person;
 
 3      (2)  The law enforcement person's family; or
 
 4      (3)  Persons otherwise determined by the clerk of the county
 
 5           in which the person is registered,
 
 6 that person may apply to the county clerk in writing to keep
 
 7 confidential the information relating to the residence address
 
 8 and telephone number contained in the affidavit of registration
 
 9 of that person, or any list or register prepared therefrom.  For
 
10 purposes of this section, a law enforcement person's family
 
11 includes a reciprocal beneficiary of the law enforcement person."
 
12      SECTION 3.  Section 28-101, Hawaii Revised Statutes, is
 
13 amended by amending subsections (a) and (b) to read as follows:
 
14      "(a)  The attorney general shall establish a statewide
 
15 witness program through which the attorney general may fund or
 
16 provide for the security and protection of a government witness
 
17 or a potential government witness in an official proceeding or
 
18 investigation where the attorney general determines that an
 
19 offense such as those described in sections 710-1071
 
20 (intimidating a witness), 710-1072 (tampering with a witness), or
 
21 710-1072.2 (retaliating against a witness) is likely to be
 
22 committed or which involves great public interest.  The attorney
 
23 general may also fund or provide for the security and protection
 

 
a                                                     GOV-14(99)
Page 3                                                     1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 of the immediate family of, the reciprocal beneficiary of, or a
 
 2 person otherwise closely associated with, such witness or
 
 3 potential witness if the family, reciprocal beneficiary, or
 
 4 person may also be endangered.  In determining whether such
 
 5 security and protection or funds are to be provided, the attorney
 
 6 general shall give greatest priority to official proceedings or
 
 7 investigations involving pending or potential organized crime,
 
 8 racketeering activity or career criminal prosecutions.
 
 9      (b)  In connection with the security and protection of a
 
10 witness, a potential witness, or an immediate family member,
 
11 reciprocal beneficiary, or close associate of a witness or
 
12 potential witness, the attorney general may fund or take any
 
13 action the attorney general determines to be necessary to protect
 
14 such person from bodily injury, or to assure the person's health,
 
15 safety, and welfare, for as long as, in the judgment of the
 
16 attorney general, such danger exists."
 
17      SECTION 4.  Section 76-44, Hawaii Revised Statutes, is
 
18 amended to read as follows:
 
19      "76-44  Racial, sex, age, religious, color, ancestry,
 
20 martial status, reciprocal beneficiary status, or political
 
21 consideration barred.  No person holding any position in the
 
22 civil service shall be suspended, demoted, or dismissed from the
 
23 person's position on racial, sex, age, religious, color,
 

 
a                                                     GOV-14(99)
Page 4                                                     1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 ancestry, marital or reciprocal beneficiary status, or political
 
 2 grounds."
 
 3      SECTION 5.  Section 76-103, Hawaii Revised Statutes, is
 
 4 amended to read as follows:
 
 5      "76-103  Veteran's preference.  The extent to which
 
 6 veteran's preference shall be given to veterans, to disabled
 
 7 veterans, to spouses or reciprocal beneficiaries of disabled
 
 8 veterans, [and] to surviving spouses of deceased servicemen who
 
 9 have not remarried and to surviving reciprocal beneficiaries of
 
10 deceased servicemen who have not entered into a subsequent
 
11 reciprocal beneficiary relationship shall be provided by rules
 
12 and regulations."
 
13      SECTION 6.  Section 90-2, Hawaii Revised Statutes, is
 
14 amended by amending subsection (b) to read as follows:
 
15      "(b) No person shall on the basis of sex, age, race, color,
 
16 ancestry, religion, national origin, marital status, status as a
 
17 reciprocal beneficiary, physical or mental handicap, or political
 
18 grounds, be excluded from participation in, or be denied the
 
19 benefits of, any volunteer program or volunteer activity."
 
20      SECTION 7.  Section 90-3, Hawaii Revised Statutes, is
 
21 amended by amending subsection (a) to read as follows:
 
22      "(a)  Every person regardless of his present economic
 
23 condition, race, color, ancestry, political affiliation,
 

 
a                                                     GOV-14(99)
Page 5                                                     1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 religious affiliation, sex, age, physical or mental handicap,
 
 2 [or] , or status as a reciprocal beneficiary marital status has
 
 3 the right to volunteer his services to an agency.  An agency has
 
 4 the right to decline any voluntary offer of services, or if
 
 5 accepted, to release subsequently the volunteer who is no longer
 
 6 needed or who is found to be unacceptable."
 
 7      SECTION 8.  Section 231-1, Hawaii Revised Statutes, is
 
 8 amended by adding a new definition of "reciprocal beneficiary" to
 
 9 be appropriately inserted and to read as follows:
 
10      "Reciprocal beneficiary" means a reciprocal beneficiary as
 
11 defined in section 572C-3.  The terms "husband and wife",
 
12 "spouse", and "head of household" shall include persons who are
 
13 reciprocal beneficiaries, as the context allows, and the terms
 
14 "marriage" and "marital status" shall include reciprocal
 
15 beneficiary relationships, as the context allows."
 
16      SECTION 9.  Section 235-2.4, Hawaii Revised Statutes, is
 
17 amended:
 
18      1.   By amending subsection (a) to read as follows:
 
19      "(a)  Section 63 (with respect to taxable income defined) of
 
20 the Internal Revenue Code shall be operative for the purposes of
 
21 this chapter, except that the standard deduction amount in
 
22 section 63(c) of the Internal Revenue Code shall instead mean:
 
23      (1)  $1,900 in the case of:
 

 
a                                                     GOV-14(99)
Page 6                                                     1315
                                     S.B. NO.           
                                                        
                                                        

 
 1           (A)  A joint return as provided by section 235-93, or
 
 2           (B)  A surviving spouse (as defined in section 2(a) of
 
 3                the Internal Revenue Code),
 
 4      (2)  $1,650 in the case of a head of household (as defined
 
 5           in section 2(b) of the Internal Revenue Code),
 
 6      (3)  $1,500 in the case of an individual who is not married
 
 7           and who is not a surviving spouse or head of household,
 
 8           or
 
 9      (4)  $950 in the case of a married individual or a
 
10           reciprocal beneficiary filing a separate return.
 
11 Section 63(c)(4) shall not be operative in this State.  Section
 
12 63(c)(5) shall be operative, except that the limitation on basic
 
13 standard deduction in the case of certain dependents shall be the
 
14 greater of $500 or such individual's earned income.  Section
 
15 63(f) shall not be operative in this State."
 
16      2.   By amending subsection (n) to read as follows:
 
17      "(n)  Section 1034 (with respect to rollover of gain on sale
 
18 of principal residence) of the Internal Revenue Code shall be
 
19 operative for the purpose of this chapter;  provided section
 
20 1034(a) (with respect to nonrecognition of gain) of the Internal
 
21 Revenue Code shall apply only to:
 
22      (1)  A taxpayer who purchases a replacement residence which
 
23           is located within the State;
 

 
a                                                     GOV-14(99)
Page 7                                                     1315
                                     S.B. NO.           
                                                        
                                                        

 
 1      (2)  A taxpayer who is a resident of the State, taxable upon
 
 2           the taxpayer's entire income, computed without regard
 
 3           to source within the State; or
 
 4      (3)  A taxpayer (or the taxpayer's spouse or reciprocal
 
 5           beneficiary if the old residence and the new residence
 
 6           are each used by the taxpayer and the taxpayer's spouse
 
 7           or reciprocal beneficiary as their principal residence)
 
 8           who, while serving on extended active duty with the
 
 9           armed forces of the United States, purchased a
 
10           residence in Hawai'i and later sold the residence."
 
11      SECTION 10.  Section 235-4, Hawaii Revised Statutes, is
 
12 amended by amending subsections (b) and (c) to read as follows:
 
13      "(b)  Nonresidents.  In the case of a nonresident, the tax
 
14 applies to the income received or derived from property owned,
 
15 personal services performed, trade, or business carried on, and
 
16 any and every other source in the State.
 
17      In the case of a nonresident spouse or reciprocal
 
18 beneficiary filing a joint return with a resident spouse[,] or
 
19 reciprocal beneficiary, the tax applies to the entire income of
 
20 the nonresident spouse or reciprocal beneficiary computed without
 
21 regard to source in the State.
 
22      (c)  Change of status.  Except where a joint return is
 
23 filed, when the status of a taxpayer changes during the taxable
 

 
a                                                     GOV-14(99)
Page 8                                                     1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 year from resident to nonresident, or from nonresident to
 
 2 resident, the tax imposed by this chapter applies to the entire
 
 3 income earned during the period of residence in the manner
 
 4 provided in subsection (a) of this section and during the period
 
 5 of nonresidence the tax shall apply upon the income received or
 
 6 derived as a nonresident in the manner provided in subsection (b)
 
 7 of this section; provided that if it cannot be determined whether
 
 8 income was received or derived during the period of residence or
 
 9 during the period of nonresidence, there shall be attributed to
 
10 the State such portion of the income as is determined by applying
 
11 to such income for the whole taxable year the ratio which the
 
12 period of residence in the State bears to the whole taxable year,
 
13 unless the taxpayer shows to the satisfaction of the department
 
14 of taxation that the result is to attribute to the state income,
 
15 dependent upon residence, received or derived during the period
 
16 of nonresidence, in which event the amount of income as to which
 
17 such showing is made shall be excluded.
 
18      The apportionment of income provided by this subsection
 
19 shall not apply where one spouse or reciprocal beneficiary is a
 
20 resident of this State and a joint return is filed with the
 
21 nonresident spouse or reciprocal beneficiary in which event the
 
22 tax shall be computed on their aggregate income in the manner
 
23 provided in section 235-52 without regard to source in the State.
 

 
a                                                     GOV-14(99)
Page 9                                                     1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 Where, however, both spouses or reciprocal beneficiaries change
 
 2 their status from resident to nonresident or from nonresident to
 
 3 resident, their income shall be apportioned in the manner
 
 4 provided in this subsection."
 
 5      SECTION 11.  Section 235-5.5, Hawaii Revised Statutes, is
 
 6 amended to read as follows:
 
 7      "235-5.5  Individual housing accounts.(a)  There shall be
 
 8 allowed as a deduction from gross income the amount, not to
 
 9 exceed $5,000, paid in cash during the taxable year by an
 
10 individual taxpayer to an individual housing account established
 
11 for the individual's benefit to provide funding for the purchase
 
12 of the individual's first principal residence.  A deduction not
 
13 to exceed $10,000 shall be allowed for a married couple or
 
14 reciprocal beneficiaries filing a joint return.  No deduction
 
15 shall be allowed on any amounts distributed less than three
 
16 hundred sixty-five days from the date on which a contribution is
 
17 made to the account.  Any deduction claimed for a previous
 
18 taxable year for amounts distributed less than three hundred
 
19 sixty-five days from the date on which a contribution was made
 
20 shall be disallowed and the amount deducted shall be included in
 
21 the previous taxable year's gross income and the tax reassessed.
 
22 The interest paid or accrued within the taxable year on the
 
23 account shall not be included in the individual's gross income.
 

 
a                                                     GOV-14(99)
Page 10                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 For purposes of this section, the term "first principal
 
 2 residence" means a residential property purchased with the
 
 3 payment or distribution from the individual housing account which
 
 4 shall be owned and occupied as the only home by an individual who
 
 5 did not have any interest in, individually, or whose spouse did
 
 6 not have any interest in, if the individual is married, a
 
 7 residential property within the last five years of opening the
 
 8 individual housing account.
 
 9      In the case of a married couple or reciprocal beneficiaries
 
10 filing separate returns, the sum of the deductions allowable to
 
11 each of them for the taxable year shall not exceed $5,000, or
 
12 $10,000 for a joint return, for amounts paid in cash, excluding
 
13 interest paid or accrued thereon.
 
14      The amounts paid in cash allowable as a deduction under this
 
15 section to an individual for all taxable years shall not exceed
 
16 $25,000, excluding interest paid or accrued.  In the case of
 
17 married individuals or reciprocal beneficiaries having separate
 
18 individual housing accounts, the sum of the separate accounts and
 
19 the deduction under this section shall not exceed $25,000,
 
20 excluding interest paid or accrued thereon.
 
21      (b)  For purposes of this section, the term "individual
 
22 housing account" means a trust created or organized in Hawai`i
 
23 for the exclusive benefit of an individual, or, in the case of a
 

 
a                                                     GOV-14(99)
Page 11                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 married individual[,] or reciprocal beneficiaries, for the
 
 2 exclusive benefit of the individual and spouse or reciprocal
 
 3 beneficiary jointly, but only if the written governing instrument
 
 4 creating the trust meets the following requirements:
 
 5      (1)  Contributions shall not be accepted for the taxable
 
 6           year in excess of $5,000 (or $10,000 in the case of a
 
 7           joint return) or in excess of $25,000 for all taxable
 
 8           years, exclusive of interest paid or accrued;
 
 9      (2)  The trustee is a bank, a savings and loan association,
 
10           a credit union, or a depository financial services loan
 
11           company, chartered, licensed, or supervised under
 
12           federal or state law, whose accounts are insured by the
 
13           Federal Deposit Insurance Corporation, the National
 
14           Credit Union Administration, or any agency of this
 
15           State or any federal agency established for the purpose
 
16           of insuring accounts in these financial institutions.
 
17           The financial institution must actively make
 
18           residential real estate mortgage loans in Hawai`i;
 
19      (3)  The assets of the trust shall be invested only in fully
 
20           insured savings or time deposits.  Funds held in the
 
21           trust may be commingled for purposes of investment, but
 
22           individual records shall be maintained by the trustee
 
23           for each individual housing account holder which show
 

 
a                                                     GOV-14(99)
Page 12                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1           all transactions in detail;
 
 2      (4)  The entire interest of an individual or married couple
 
 3           or reciprocal beneficiaries for whose benefit the trust
 
 4           is maintained shall be distributed to the individual or
 
 5           couple not later than one hundred twenty months after
 
 6           the date on which the first contribution is made to the
 
 7           trust;
 
 8      (5)  Except as provided in subsection (g), the trustee shall
 
 9           not distribute the funds in the account unless it (A)
 
10           verifies that the money is to be used for the purchase
 
11           of a first principal residence located in Hawai`i, and
 
12           provides that the instrument of payment is payable to
 
13           the mortgagor, construction contractor, or other vendor
 
14           of the property purchased;  or (B) withholds an amount
 
15           equal to ten per cent of the amount withdrawn from the
 
16           account and remits this amount to the director within
 
17           ten days after the date of the withdrawal.  The amount
 
18           so withheld shall be applied to the liability of the
 
19           taxpayer under subsections (c) and (e); and
 
20      (6)  If any amounts are distributed before the expiration of
 
21           three hundred sixty-five days from the date on which a
 
22           contribution is made to the account, the trustee shall
 
23           so notify in writing the taxpayer and the director.  If
 

 
a                                                     GOV-14(99)
Page 13                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1           the trustee makes the verification required in
 
 2           paragraph (5)(A), then the department shall disallow
 
 3           the deduction under subsection (a) and subsections (c),
 
 4           (e), and (f) shall not apply to that amount.  If the
 
 5           trustee withholds an amount under paragraph (5)(B),
 
 6           then the department shall disallow the deduction under
 
 7           subsection (a) and subsection (e) shall apply, but
 
 8           subsection (c) shall not apply.
 
 9      (c)  Any contributions paid or distributed out of an
 
10 individual housing account shall be included in gross income by
 
11 the individual for whose benefit the account was established for
 
12 the taxable year in which the payment or distribution is
 
13 received, unless the amount is used exclusively in connection
 
14 with the purchase of the first principal residence in Hawai`i for
 
15 the individual for whose benefit the account was established.
 
16      (d)  The transfer of an individual's interest in an
 
17 individual housing account to a spouse or reciprocal beneficiary
 
18 under a dissolution of marriage decree or termination of a
 
19 reciprocal beneficiary relationship or under a written instrument
 
20 incident to a dissolution of marriage or termination of a
 
21 reciprocal beneficiary relationship shall not be considered a
 
22 taxable transfer made by the individual, and the interest, at the
 
23 time of the transfer, shall be treated as part of an individual
 

 
a                                                     GOV-14(99)
Page 14                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 housing account of the transferee, and not of the transferor.
 
 2 After the transfer, the account shall be treated, for purposes of
 
 3 this section, as maintained for the benefit of the transferee.
 
 4      (e)  If a distribution from an individual housing account to
 
 5 an individual for whose benefit the account was established is
 
 6 made and not used in connection with the purchase of the first
 
 7 principal residence in Hawai`i for the individual, the tax
 
 8 liability of the individual under this chapter for the taxable
 
 9 year in which the distribution is received shall be increased by
 
10 an amount equal to ten per cent of the amount of the distribution
 
11 which is includable in the individual's gross income for the
 
12 taxable year.
 
13      If, during any taxable year, the individual uses the account
 
14 or any portion thereof as security for a loan, the portion so
 
15 used shall be treated as if it had been distributed to that
 
16 individual.
 
17      (f)  If the individual for whose benefit the individual
 
18 housing account was established purchases a residential property
 
19 in Hawai`i with the distribution from the individual housing
 
20 account:
 
21      (1)  Before January 1, 1990, and if the individual sells in
 
22           any manner or method or by use of any instrument
 
23           conveying or transferring the residential property, the
 

 
a                                                     GOV-14(99)
Page 15                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1           gross income of the individual under this chapter for
 
 2           the taxable year in which the residential property is
 
 3           sold, conveyed, or transferred, whichever is
 
 4           applicable, shall include an amount equal to the amount
 
 5           of the distribution from the individual housing
 
 6           account, and in addition, the tax liability of the
 
 7           individual shall be increased by an amount equal to ten
 
 8           per cent of the total distribution from the individual
 
 9           housing account.
 
10      (2)  After December 31, 1989, the individual shall report
 
11           one-tenth of the total distribution from the individual
 
12           housing account used to purchase the residential
 
13           property as gross income in the taxable year in which
 
14           the distribution is completed and in each taxable year
 
15           thereafter until all of the distribution has been
 
16           included in the individual's gross income at the end of
 
17           the tenth taxable year after the purchase of the
 
18           residential property.  If the individual sells in any
 
19           manner or method or by use of any instrument conveying
 
20           or transferring the residential property, the gross
 
21           income of the individual under this chapter for the
 
22           taxable year in which the residential property is sold,
 
23           conveyed, or transferred, whichever is applicable,
 

 
a                                                     GOV-14(99)
Page 16                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1           shall include an amount equal to the amount of the
 
 2           distribution from the individual housing account not
 
 3           previously reported as gross income, and in addition,
 
 4           the tax liability of the individual shall be increased
 
 5           by an amount equal to ten per cent of the total
 
 6           distribution from the individual housing account.  If
 
 7           the individual sells the residential property in any
 
 8           manner as provided in this paragraph after all of the
 
 9           distribution has been included in the individual's
 
10           gross income at the end of the tenth taxable year after
 
11           the purchase of the residential property, the tax
 
12           liability of the individual shall not be increased by
 
13           an amount equal to ten per cent of the total
 
14           distribution from the individual housing account.
 
15      An individual who purchased a residential property in
 
16 Hawai`i with the distribution from an individual housing account
 
17 before January 1, 1990, who is subject to paragraph (1) may elect
 
18 to report as provided in paragraph (2).  The election shall be
 
19 made before January 1, 1991.  If the individual makes the
 
20 election, the individual shall report one-tenth of the total
 
21 distribution from the individual housing account as gross income
 
22 in the taxable year in which the election occurs and in each
 
23 taxable year thereafter until all of the distribution has been
 

 
a                                                     GOV-14(99)
Page 17                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 included in gross income as provided by paragraph (2).  If the
 
 2 individual making the election sells the residential property in
 
 3 any manner as provided in paragraph (2), then the individual
 
 4 shall include as income the amount of the distribution not
 
 5 previously reported as income and increase the individual's tax
 
 6 liability as provided in the second sentence of paragraph (2),
 
 7 except when the third sentence of paragraph (2) applies.
 
 8      (g) No tax liability shall be imposed under this section if:
 
 9      (1)  The payment or distribution is attributable to the
 
10           individual dying or becoming totally disabled; or
 
11      (2)  Residential property subject to subsection (f) is
 
12           transferred by will or by operation of law or sold due
 
13           to the death or total disability of an individual or
 
14           individual's spouse,
 
15 subject to the following:
 
16      An individual shall not be considered to be totally disabled
 
17 unless proof is furnished of the total disability in the form and
 
18 manner as the director may require.
 
19      Upon the death of an individual for whose benefit an
 
20 individual housing account has been established, the funds in the
 
21 account shall be payable to the estate of the individual;
 
22 provided that if the account was held jointly by the decedent and
 
23 a spouse or reciprocal beneficiary of the decedent, the account
 

 
a                                                     GOV-14(99)
Page 18                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 shall terminate and be paid to the surviving spouse[;] or
 
 2 reciprocal beneficiary; or, if the surviving spouse or reciprocal
 
 3 beneficiary so elects, the spouse or reciprocal beneficiary may
 
 4 continue the account as an individual housing account.  Upon the
 
 5 total disability of an individual for whose benefit an individual
 
 6 housing account has been established, the individual or the
 
 7 individual's authorized representative may elect to continue the
 
 8 account or terminate the account and be paid the assets; provided
 
 9 that if the account was held jointly by a totally disabled person
 
10 and a spouse of that person, then the spouse or an authorized
 
11 representative may elect to continue the account or terminate the
 
12 account and be paid the assets.
 
13      (h)  If the individual for whose benefit the individual
 
14 housing account was established subsequently marries or
 
15 establishes a reciprocal beneficiary relationship with a person
 
16 who has or has had any interest in residential property, the
 
17 individual's housing account shall be terminated, the funds
 
18 therein shall be distributed to the individual, and the amount of
 
19 the funds shall be includable in the individual's gross income
 
20 for the taxable year in which such marriage or establishment of a
 
21 reciprocal beneficiary relationship took place; provided that the
 
22 tax liability defined under subsection (f) shall not be imposed.
 
23      (i)  The trustee of an individual housing account shall make
 

 
a                                                     GOV-14(99)
Page 19                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 reports regarding the account to the director and to the
 
 2 individual for whom the account is maintained with respect to
 
 3 contributions, distributions, and other matters as the director
 
 4 may require under rules.  The reports shall be filed at a time
 
 5 and in a manner as may be required by rules adopted under chapter
 
 6 91.  A person who fails to file a required report shall be
 
 7 subject to a penalty of $10 to be paid to the director for each
 
 8 instance of failure to file."
 
 9      SECTION 12.  Section 235-7, Hawaii Revised Statutes, is
 
10 amended by amending subsection (a) to read as follows:
 
11      "(a)  There shall be excluded from gross income, adjusted
 
12 gross income, and taxable income:
 
13      (1)  Income not subject to taxation by the State under the
 
14           Constitution and laws of the United States;
 
15      (2)  Rights, benefits, and other income exempted from
 
16           taxation by section 88-91, having to do with the state
 
17           retirement system, and the rights, benefits, and other
 
18           income, comparable to the rights, benefits, and other
 
19           income exempted by section 88-91, under any other
 
20           public retirement system;
 
21      (3)  Any compensation received in the form of a pension for
 
22           past services;
 
23      (4)  Compensation paid to a patient affected with Hansen's
 

 
a                                                     GOV-14(99)
Page 20                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1           disease employed by the State or the United States in
 
 2           any hospital, settlement, or place for the treatment of
 
 3           Hansen's disease;
 
 4      (5)  Except as otherwise expressly provided, payments made
 
 5           by the United States or this State, under an act of
 
 6           Congress or a law of this State, which by express
 
 7           provision or administrative regulation or
 
 8           interpretation are exempt from both the normal and
 
 9           surtaxes of the United States, even though not so
 
10           exempted by the Internal Revenue Code itself;
 
11      (6)  Any income expressly exempted or excluded from the
 
12           measure of the tax imposed by this chapter by any other
 
13           law of the State, it being the intent of this chapter
 
14           not to repeal or supersede any such express exemption
 
15           or exclusion;
 
16      (7)  The first $1,750 received by each member of the reserve
 
17           components of the Army, Navy, Air Force, Marine Corps,
 
18           or Coast Guard of the United States of America, and the
 
19           Hawai`i national guard as compensation for performance
 
20           of duty;
 
21      (8)  Income derived from the operation of ships or aircraft
 
22           if the income is exempt under the Internal Revenue Code
 
23           pursuant to the provisions of an income tax treaty or
 

 
a                                                     GOV-14(99)
Page 21                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1           agreement entered into by and between the United States
 
 2           and a foreign country, provided that the tax laws of
 
 3           the local governments of that country reciprocally
 
 4           exempt from the application of all of their net income
 
 5           taxes, the income derived from the operation of ships
 
 6           or aircraft which are documented or registered under
 
 7           the laws of the United States;
 
 8      (9)  The value of legal services provided by a prepaid legal
 
 9           service plan to a taxpayer, the taxpayer's spouse[,] or
 
10           reciprocal beneficiary, and the taxpayer's dependents;
 
11     (10)  Amounts paid, directly or indirectly, by a prepaid
 
12           legal service plan to a taxpayer as payment or
 
13           reimbursement for the provision of legal services to
 
14           the taxpayer, the taxpayer's spouse[,] or reciprocal
 
15           beneficiary, and the taxpayer's dependents;
 
16     (11)  Contributions by an employer to a prepaid legal service
 
17           plan for compensation (through insurance or otherwise)
 
18           to the employer's employees for the costs of legal
 
19           services incurred by the employer's employees, their
 
20           spouses, and their dependents; and
 
21     (12)  Amounts received in the form of a monthly surcharge by
 
22           a utility acting on behalf of an affected utility under
 
23           section 269-16.3 shall not be gross income, adjusted
 

 
a                                                     GOV-14(99)
Page 22                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1           gross income, or taxable income for the acting utility
 
 2           under this chapter.  Any amounts retained by the acting
 
 3           utility for collection or other costs shall not be
 
 4           included in this exemption."
 
 5      SECTION 13.  Section 235-16, Hawaii Revised Statutes, is
 
 6 amended by amending subsection (a) to read as follows:
 
 7      "(a)  If the collection of the county general excise and use
 
 8 tax surcharge starts on January 1, 1993, as provided in sections
 
 9 46-16.7, 237-8.5, and 238-2.5, then for taxable years, in each
 
10 year that the surcharge is in effect, beginning after December
 
11 31, 1992, and ending before January 1, 2003, each resident
 
12 individual taxpayer, who files an individual income tax return
 
13 for a taxable year, and who is not claimed or is not otherwise
 
14 eligible to be claimed as a dependent by another taxpayer for
 
15 federal or Hawai`i state individual income tax purposes, may
 
16 claim a county surcharge excise tax credit in the amount computed
 
17 under this section against the resident taxpayer's individual
 
18 income tax liability for the taxable year for which the
 
19 individual income tax return is being filed; provided that a
 
20 resident individual who has no income or no income taxable under
 
21 this chapter and who is not claimed or is not otherwise eligible
 
22 to be claimed as a dependent by a taxpayer for federal or Hawai`i
 
23 state individual income tax purposes may claim this credit.
 

 
a                                                     GOV-14(99)
Page 23                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1      (1)  Each resident individual taxpayer who resides for more
 
 2           than two hundred days of the taxable year in the
 
 3           aggregate in a county in which the county general
 
 4           excise and use tax surcharge is in effect may claim the
 
 5           tax credit according to the adjusted gross income
 
 6           bracket shown in the following schedule:
 
 7                        TAX CREDIT SCHEDULE
 
 8      Adjusted Gross Income       Tax Credit
 
 9           Under $5,000             $ 25
 
10      $5,000 under $10,000            45
 
11      $10,000 under $15,000           65
 
12      $15,000 under $20,000           90
 
13      $20,000 under $30,000          110
 
14      $30,000 under $40,000          125
 
15      $40,000 under $50,000          145
 
16      $50,000 under $75,000          185
 
17      $75,000 under $100,000         205
 
18      $100,000 and over              210
 
19      (2)  Each resident individual taxpayer who resides for more
 
20           than two hundred days of the taxable year in the
 
21           aggregate in a county which has not adopted the county
 
22           general excise and use tax surcharge may claim a tax
 
23           credit according to the adjusted gross income bracket
 

 
a                                                     GOV-14(99)
Page 24                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1           shown in the schedule below:
 
 2                        TAX CREDIT SCHEDULE
 
 3      Adjusted Gross Income       Tax Credit
 
 4           Under $5,000             $ 5
 
 5      $5,000 under $10,000           10
 
 6      $10,000 under $20,000          15
 
 7      $20,000 under $30,000          20
 
 8      $30,000 under $40,000          25
 
 9      $40,000 under $50,000          30
 
10      $50,000 under $75,000          35
 
11      $75,000 and over               40
 
12      A husband and wife or reciprocal beneficiaries filing
 
13 separate returns for a taxable year for which a joint return
 
14 could have been filed by them shall claim only the tax credit to
 
15 which they would have been entitled had a joint return been
 
16 filed.
 
17      SECTION 14.  Section 235-51, Hawaii Revised Statutes, is
 
18 amended:
 
19      1.  By amending subsection (a) to read as follows:
 
20      "(a)  There is hereby imposed on the taxable income of (1)
 
21 every taxpayer who files a joint return under section 235-93; and
 
22 (2) every surviving spouse or reciprocal beneficiary a tax
 
23 determined in accordance with the following table:
 

 
a                                                     GOV-14(99)
Page 25                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1      In the case of any taxable year beginning after December 31,
 
 2 1988:
 
 3 If the taxable income is:            The tax shall be:
 
 4 Not over $3,000                      2% of taxable income
 
 5 Over $3,000 but                      $60.00 plus 4% of
 
 6    not over $5,000                     excess over $3,000
 
 7 Over $5,000 but                      $140.00 plus 6% of
 
 8    not over $7,000                     excess over $5,000
 
 9 Over $7,000 but                      $260.00 plus 7.25% of
 
10    not over $11,000                    excess over $7,000
 
11 Over $11,000 but                     $550.00 plus 8% of
 
12    not over $21,000                    excess over $11,000
 
13 Over $21,000 but                     $1,350.00 plus 8.75% of
 
14    not over $31,000                    excess over $21,000
 
15 Over $31,000 but                     $2,225.00 plus 9.5% of
 
16    not over $41,000                    excess over $31,000
 
17 Over $41,000                         $3,175.00 plus 10% of
 
18                                        excess over $41,000"
 
19      2.   By amending subsection (c) to read as follows:
 
20      "(c)  There is hereby imposed on the taxable income of (1)
 
21 every unmarried individual (other than a surviving spouse, a
 
22 surviving reciprocal beneficiary, or the head of a household) and
 
23 (2) on the taxable income of every married individual who does
 

 
a                                                     GOV-14(99)
Page 26                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 not make a single return jointly with the individual's spouse
 
 2 under section 235-93 a tax determined in accordance with the
 
 3 following table:
 
 4      In the case of any taxable year beginning after December 31,
 
 5 1988:
 
 6 If the taxable income is:            The tax shall be:
 
 7 Not over $1,500                      2% of taxable income
 
 8 Over $1,500 but                      $30.00 plus 4% of
 
 9   not over $2,500                      excess over $1,500
 
10 Over $2,500 but                      $70.00 plus 6% of
 
11   not over $3,500                      excess over $2,500
 
12 Over $3,500 but                      $130.00 plus 7.25% of
 
13   not over $5,500                      excess over $3,500
 
14 Over $5,500 but                      $275.00 plus 8% of
 
15   not over $10,500                     excess over $5,500
 
16 Over $10,500 but                     $675.00 plus 8.75% of
 
17   not over $15,500                     excess over $10,500
 
18 Over $15,500 but                     $1,112.50 plus 9.5% of
 
19   not over $20,500                     excess over $15,500
 
20 Over $20,500                         $1,587.50 plus 10% of
 
21                                        excess over $20,500"
 
22      SECTION 15.  Section 235-52, Hawaii Revised Statutes, is
 
23 amended to read as follows:
 
24      "235-52  Tax in case of joint return or return of surviving
 

 
a                                                     GOV-14(99)
Page 27                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 spouse[.] or reciprocal beneficiary.  In the case of a joint
 
 2 return of a husband and wife or of reciprocal beneficiaries under
 
 3 section 235-93, the tax imposed, as near as may be, by this
 
 4 chapter shall be twice the tax which would be imposed if the
 
 5 taxable income were cut in half.  For purposes of this section
 
 6 and section 235-53, a return of a surviving spouse, as defined in
 
 7 the Internal Revenue Code, or reciprocal beneficiary as defined
 
 8 in chapter 572C, shall be treated as a joint return of a husband
 
 9 and wife or reciprocal beneficiary under section 235-93."
 
10      SECTION 16.  Section 235-54, Hawaii Revised Statutes, is
 
11 amended by amending subsection (a) to read as follows:
 
12      "(a)  In computing the taxable income of any individual,
 
13 there shall be deducted, in lieu of the personal exemptions
 
14 allowed by the Internal Revenue Code, personal exemptions
 
15 computed as follows:  Ascertain the number of exemptions which
 
16 the individual can lawfully claim under the Internal Revenue
 
17 Code, add an additional exemption for the taxpayer or the
 
18 taxpayer's spouse or reciprocal beneficiary who is sixty-five
 
19 years of age or older within the taxable year, and multiply that
 
20 number by $1,040, for taxable years beginning after December 31,
 
21 1984.  A nonresident shall be entitled to the same personal
 
22 exemptions as a resident, without proration of the personal
 

 
a                                                     GOV-14(99)
 
Page 28                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 exemptions on account of income from sources outside the State.
 
 2 In the case of an individual with respect to whom an exemption
 
 3 under this section is allowable to another taxpayer for a taxable
 
 4 year beginning in the calendar year in which the individual's
 
 5 taxable year begins, the personal exemption amount applicable to
 
 6 such individual under this subsection for such individual's
 
 7 taxable year shall be zero."
 
 8      SECTION 17.  Section 235-55.6, Hawaii Revised Statutes, is
 
 9 amended to read as follows:
 
10      "235-55.6  Expenses for household and dependent care
 
11 services necessary for gainful employment.(a)  Allowance of
 
12 credit.
 
13      (1)  In general.  For each resident taxpayer, who files an
 
14           individual income tax return for a taxable year, and
 
15           who is not claimed or is not otherwise eligible to be
 
16           claimed as a dependent by another taxpayer for federal
 
17           or Hawai`i state individual income tax purposes, who
 
18           maintains a household which includes as a member one or
 
19           more qualifying individuals (as defined in subsection
 
20           (b)(1)), there shall be allowed as a credit against the
 
21           tax imposed by this chapter for the taxable year an
 
22           amount equal to the applicable percentage of the
 
23           employment-related expenses (as defined in subsection
 

 
a                                                     GOV-14(99)
Page 29                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1           (b)(2)) paid by such individual during the taxable
 
 2           year.  If the tax credit claimed by a resident taxpayer
 
 3           exceeds the amount of income tax payment due from the
 
 4           resident taxpayer, the excess of the credit over
 
 5           payments due shall be refunded to the resident
 
 6           taxpayer; provided that tax credit properly claimed by
 
 7           a resident individual who has no income tax liability
 
 8           shall be paid to the resident individual; and provided
 
 9           further that no refunds or payment on account of the
 
10           tax credit allowed by this section shall be made for
 
11           amounts less than $1.
 
12      (2)  Applicable percentage defined.  For purposes of
 
13           paragraph (1), the term "applicable percentage" means
 
14           twenty-five per cent reduced (but not below fifteen per
 
15           cent) by one percentage point of each $2,000 (or
 
16           fraction thereof) by which the taxpayer's adjusted
 
17           gross income for the taxable year exceeds $22,000.
 
18      (b)  Definitions of qualifying individual and employment-
 
19 related expenses.  For purposes of this section:
 
20      (1)  Qualifying individual.  The term "qualifying
 
21           individual" means:
 
22           (A)  A dependent of the taxpayer who is under the age
 
23                of thirteen and with respect to whom the taxpayer
 

 
a                                                     GOV-14(99)
Page 30                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1                is entitled to a deduction under section 235-
 
 2                54(a),
 
 3           (B)  A dependent of the taxpayer who is physically or
 
 4                mentally incapable of caring for oneself, or
 
 5           (C)  The spouse or reciprocal beneficiary of the
 
 6                taxpayer, if the spouse or reciprocal beneficiary
 
 7                is physically or mentally incapable of caring for
 
 8                oneself.
 
 9      (2)  Employment-related expenses.
 
10           (A)  In general.  The term "employment-related
 
11                expenses" means amounts paid for the following
 
12                expenses, but only if such expenses are incurred
 
13                to enable the taxpayer to be gainfully employed
 
14                for any period for which there are one or more
 
15                qualifying individuals with respect to the
 
16                taxpayer:
 
17                (i)  Expenses for household services, and
 
18               (ii)  Expenses for the care of a qualifying
 
19                     individual.
 
20           Such term shall not include any amount paid for
 
21           services outside the taxpayer's household at a camp
 
22           where the qualifying individual stays overnight.
 
23           (B)  Exception.  Employment-related expenses described
 
24                in subparagraph (A) which are incurred for
 

 
a                                                     GOV-14(99)
Page 31                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1                services outside the taxpayer's household shall be
 
 2                taken into account only if incurred for the care
 
 3                of:
 
 4                (i)  A qualifying individual described in
 
 5                     paragraph (1)(A), or
 
 6               (ii)  A qualifying individual (not described in
 
 7                     paragraph (1)(A)) who regularly spends at
 
 8                     least eight hours each day in the taxpayer's
 
 9                     household.
 
10           (C)  Dependent care centers.  Employment-related
 
11                expenses described in subparagraph (A) which are
 
12                incurred for services provided outside the
 
13                taxpayer's household by a dependent care center
 
14                (as defined in subparagraph (D)) shall be taken
 
15                into account only if:
 
16                (i)  Such center complies with all applicable
 
17                     laws, rules, and regulations of this State,
 
18                     if the center is located within the
 
19                     jurisdiction of this State; or
 
20               (ii)  Such center complies with all applicable
 
21                     laws, rules, and regulations of the
 
22                     jurisdiction in which the center is located,
 
23                     if the center is located outside the State;
 

 
a                                                     GOV-14(99)
Page 32                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1                     and
 
 2              (iii)  The requirements of subparagraph (B) are met.
 
 3           (D)  Dependent care center defined.  For purposes of
 
 4                this paragraph, the term "dependent care center"
 
 5                means any facility which:
 
 6                (i)  Provides care for more than six individuals
 
 7                     (other than individuals who reside at the
 
 8                     facility), and
 
 9               (ii)  Receives a fee, payment, or grant for
 
10                     providing services for any of the individuals
 
11                     (regardless of whether such facility is
 
12                     operated for profit).
 
13      (c)  Dollar limit on amount creditable.  The amount of the
 
14 employment-related expenses incurred during any taxable year
 
15 which may be taken into account under subsection (a) shall not
 
16 exceed:
 
17      (1)  $2,400 if there is one qualifying individual with
 
18           respect to the taxpayer for such taxable year, or
 
19      (2)  $4,800 if there are two or more qualifying individuals
 
20           with respect to the taxpayer for such taxable year.
 
21 The amount determined under paragraph (1) or (2) (whichever is
 
22 applicable) shall be reduced by the aggregate amount excludable
 
23 from gross income under section 129 (with respect to dependent
 

 
a                                                     GOV-14(99)
Page 33                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 care assistance programs) of the Internal Revenue Code for the
 
 2 taxable year.
 
 3      (d)  Earned income limitation.
 
 4      (1)  In general.  Except as otherwise provided in this
 
 5           subsection, the amount of the employment-related
 
 6           expenses incurred during any taxable year which may be
 
 7           taken into account under subsection (a) shall not
 
 8           exceed:
 
 9           (A)  In the case of an individual who is not married or
 
10                in a reciprocal beneficiary at the close of such
 
11                year, such individual's earned income for such
 
12                year, or
 
13           (B)  In the case of an individual who is married or in
 
14                a reciprocal beneficiary relationship at the close
 
15                of such year, the lesser of such individual's
 
16                earned income or the earned income of the
 
17                individual's spouse or reciprocal beneficiary for
 
18                such year.
 
19      (2)  Special rule for spouse or reciprocal beneficiary who
 
20           is a student or incapable of caring for oneself.  In
 
21           the case of a spouse or reciprocal beneficiary who is a
 
22           student or a qualified individual described in
 
23           subsection (b)(1)(C), for purposes of paragraph (1),
 
24           such spouse or reciprocal beneficiary shall be deemed
 
25           for each month during which such spouse or reciprocal
 

a                                                     GOV-14(99)
Page 34                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1           beneficiary is a full-time student at an educational
 
 2           institution, or is such a qualifying individual, to be
 
 3           gainfully employed and to have earned income of not
 
 4           less than:
 
 5           (A)  $200 if subsection (c)(1) applies for the taxable
 
 6                year, or
 
 7           (B)  $400 if subsection (c)(2) applies for the taxable
 
 8                year.
 
 9 In the case of any husband and wife[,] or reciprocal
 
10 beneficiaries, this paragraph shall apply with respect to only
 
11 one spouse or reciprocal beneficiary for any one month.
 
12      (e)  Special rules.  For purposes of this section:
 
13      (1)  Maintaining household.  An individual shall be treated
 
14           as maintaining a household for any period only if over
 
15           half the cost of maintaining the household for the
 
16           period is furnished by the individual (or, if the
 
17           individual is married or in a reciprocal beneficiary
 
18           relationship during the period, is furnished by the
 
19           individual and the individual's spouse[).] or
 
20           reciprocal beneficiary).
 
21      (2)  Married couples or reciprocal beneficiaries must file
 
22           joint return.  If the taxpayer is married or in a
 
23           reciprocal beneficiary relationship at the close of the
 

 
a                                                     GOV-14(99)
Page 35                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1           taxable year, the credit shall be allowed under
 
 2           subsection (a) only if the taxpayer and the taxpayer's
 
 3           spouse or reciprocal beneficiary file a joint return
 
 4           for the taxable year.
 
 5      (3)  Marital status.  An individual legally separated from
 
 6           the individual's spouse under a decree of divorce or of
 
 7           separate maintenance shall not be considered as
 
 8           married.
 
 9      (4)  Certain married individuals living apart.  If:
 
10           (A)  An individual who is married and who files a
 
11                separate return:
 
12                (i)  Maintains as the individual's home a
 
13                     household that constitutes for more than one-
 
14                     half of the taxable year the principal place
 
15                     of abode of a qualifying individual, and
 
16               (ii)  Furnishes over half of the cost of
 
17                     maintaining the household during the taxable
 
18                     year, and
 
19           (B)  During the last six months of the taxable year the
 
20                individual's spouse is not a member of the
 
21                household,
 
22           the individual shall not be considered as married.
 
23      (5)  Certain reciprocal beneficiaries living apart.  If:
 

 
a                                                     GOV-14(99)
Page 36                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1           (A)  An individual who is a reciprocal beneficiary and
 
 2                who files a separate return:
 
 3                (i)  Maintains as the individual's home a
 
 4                     household that constitutes for more than one-
 
 5                     half of the taxable year the principal place
 
 6                     of abode of a qualifying individual, and
 
 7               (ii)  Furnishes over half of the cost of
 
 8                     maintaining the household during the taxable
 
 9                     year,
 
10           and
 
11           (B)  During the last six months of the taxable year the
 
12                individual's reciprocal beneficiary is not a
 
13                member of the household,
 
14           the individual shall not be considered as a reciprocal
 
15           beneficiary.
 
16     [(5)] (6)  Special dependency test in case of divorced
 
17           parents, etc.  If:
 
18           (A)  Paragraph (2) or (4) of section 152(e) of the
 
19                Internal Revenue Code of 1986, as amended, applies
 
20                to any child with respect to any calendar year,
 
21                and
 
22           (B)  The child is under age thirteen or is physically
 
23                or mentally incompetent of caring for the child's
 

 
a                                                     GOV-14(99)
Page 37                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1                self,
 
 2           in the case of any taxable year beginning in the
 
 3           calendar year, the child shall be treated as a
 
 4           qualifying individual described in subsection (b)(1)(A)
 
 5           or (B) (whichever is appropriate) with respect to the
 
 6           custodial parent (within the meaning of section
 
 7           152(e)(1) of the Internal Revenue Code of 1986, as
 
 8           amended), and shall not be treated as a qualifying
 
 9           individual with respect to the noncustodial parent.
 
10     [(6)] (7) Payments to related individuals.  No credit shall
 
11           be allowed under subsection (a) for any amount paid by
 
12           the taxpayer to an individual:
 
13           (A)  With respect to whom, for the taxable year, a
 
14                deduction under section 151(c) of the Internal
 
15                Revenue Code of 1986, as amended (relating to
 
16                deduction for personal exemptions for dependents)
 
17                is allowable either to the taxpayer or the
 
18                taxpayer's spouse[,] or reciprocal beneficiary, or
 
19           (B)  Who is a child of the taxpayer (within the meaning
 
20                of section 151(c)(3) of the Internal Revenue Code
 
21                of 1986, as amended) who has not attained the age
 
22                of nineteen at the close of the taxable year.
 
23      For purposes of this paragraph, the term "taxable year"
 

 
a                                                     GOV-14(99)
Page 38                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 means the taxable year of the taxpayer in which the service is
 
 2 performed.
 
 3     [(7)] (8)  Student.  The term "student" means an individual
 
 4           who, during each of five calendar months during the
 
 5           taxable year, is a full-time student at an educational
 
 6           organization.
 
 7     [(8)] (9)  Educational organization.  The term "educational
 
 8           organization" means a school operated by the department
 
 9           of education under chapter    , an educational
 
10           organization described in section 170(b)(1)(A)(ii) of
 
11           the Internal Revenue Code of 1986, as amended, or a
 
12           university, college, or community college.
 
13     [(9)] (10)  Identifying information required with respect to
 
14           service provider.  No credit shall be allowed under
 
15           subsection (a) for any amount paid to any person
 
16           unless:
 
17           (A)  The name, address, taxpayer identification number,
 
18                and general excise tax license number of the
 
19                person are included on the return claiming the
 
20                credit,
 
21           (B)  If the person is located outside the State, the
 
22                name, address, and taxpayer identification number,
 
23                if any, of the person and a statement indicating
 

 
a                                                     GOV-14(99)
Page 39                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1                that the service provider is located outside the
 
 2                State and that the general excise tax license and,
 
 3                if applicable, the taxpayer identification numbers
 
 4                are not required, or
 
 5           (C)  If the person is an organization described in
 
 6                section 501(c)(3) of the Internal Revenue Code and
 
 7                exempt from tax under section 501(a) of the
 
 8                Internal Revenue Code, the name and address of the
 
 9                person are included on the return claiming the
 
10                credit.
 
11                In the case of a failure to provide the
 
12                information required under the preceding sentence,
 
13                the preceding sentence shall not apply if it is
 
14                shown that the taxpayer exercised due diligence in
 
15                attempting to provide the information so required.
 
16      (f)  Rules.  The director of taxation shall prescribe such
 
17 rules under chapter 91 as may be necessary to carry out the
 
18 purposes of this section."
 
19      SECTION 18.  Section 235-55.7, Hawaii Revised Statutes, is
 
20 amended by amending subsection (e) to read as follows:
 
21      "(e)  The tax credits shall be deductible from the
 
22 taxpayer's individual net income tax for the tax year in which
 
23 the credits are properly claimed; provided that a husband and
 

 
a                                                     GOV-14(99)
Page 40                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 wife or reciprocal beneficiaries filing separate returns for a
 
 2 taxable year for which a joint return could have been made by
 
 3 them shall claim only the tax credits to which they would have
 
 4 been entitled had a joint return been filed.  In the event the
 
 5 allowed tax credits exceed the amount of the income tax payments
 
 6 due from the taxpayer, the excess of credits over payments due
 
 7 shall be refunded to the taxpayer; provided that allowed tax
 
 8 credits properly claimed by an individual who has no income tax
 
 9 liability shall be paid to the individual; and provided further
 
10 that no refunds or payments on account of the tax credits allowed
 
11 by this section shall be made for amounts less than $1."
 
12      SECTION 19.  Section 235-61, Hawaii Revised Statutes, is
 
13 amended:
 
14      1.   By amending subsection (c) to read as follows:
 
15      "(c)  For each withholding period (whether weekly, biweekly,
 
16 monthly, or otherwise) the amount of tax to be withheld under
 
17 this section shall be at a rate which, for the taxable year, will
 
18 yield the tax imposed by section 235-51 upon each employee's
 
19 annual wage, as estimated from the employee's current wage in any
 
20 withholding period, but (for the purposes of this subsection of
 
21 the rates provided by section 235-51 the maximum to be taken into
 
22 consideration shall be eight per cent.  The tax for the taxable
 
23 year shall be calculated upon the following assumptions:
 

 
a                                                     GOV-14(99)
Page 41                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1      (1)  That the employee's annual wage, as estimated from the
 
 2           employee's current wage in the withholding period, will
 
 3           be the employee's sole income for the taxable year;
 
 4      (2)  That there will be no deductions therefrom in
 
 5           determining adjusted gross income;
 
 6      (3)  That in determining taxable income there shall be a
 
 7           standard deduction allowance which shall be an amount
 
 8           equal to one exemption (or more than one exemption if
 
 9           so prescribed by the director) unless (A) the taxpayer
 
10           is married or in a reciprocal beneficiary relationship
 
11           and the taxpayer's spouse or reciprocal beneficiary is
 
12           an employee receiving wages subject to withholding, or
 
13           (B) the taxpayer has withholding exemption certificates
 
14           in effect with respect to more than one employer.  For
 
15           the purposes of this section, any standard deduction
 
16           allowance under this paragraph shall be treated as if
 
17           it were denominated a withholding exemption;
 
18      (4)  That in determining taxable income there also will be
 
19           deducted the amount of exemptions and withholding
 
20           allowances granted to the employee in the computation
 
21           of taxable income, as shown by a certificate to be
 
22           filed with the employer as provided by subsection (f);
 
23           and
 

 
a                                                     GOV-14(99)
Page 42                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1      (5)  If it appears from the certificate filed pursuant to
 
 2           subsection (f) that the employee, under section 235-93,
 
 3           is entitled to make a joint return, that the employee
 
 4           and the employee's spouse or reciprocal beneficiary
 
 5           will so elect."
 
 6      2.   By amending subsections (f) and (g) to read as follows:
 
 7      (f)  On or before the date of the commencement of employment
 
 8 with an employer, the employee shall furnish the employer with a
 
 9 signed certificate relating to the number of exemptions which the
 
10 employee claims, which shall in no event exceed the number to
 
11 which the employee is entitled on the basis of the existing
 
12 facts, and also showing whether the employee is married and is,
 
13 under section 235-93, entitled to make a joint return.  The
 
14 certificate shall be in such form and contain such information as
 
15 may be prescribed by the department.
 
16      If, on any day during the calendar year, there is a change
 
17 in the employee's marital or reciprocal beneficiary status and
 
18 the employee no longer is entitled to make a joint return, or the
 
19 number of exemptions to which the employee is entitled is less
 
20 than the number of exemptions claimed by the employee on the
 
21 certificate then in effect with respect to the employee, the
 
22 employee shall within ten days thereafter furnish the employer
 
23 with a new certificate showing the employee's present marital or
 

 
a                                                     GOV-14(99)
Page 43                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 reciprocal beneficiary status, or relating to the number of
 
 2 exemptions which the employee then claims, which shall in no
 
 3 event exceed the number to which the employee is entitled on the
 
 4 basis of the existing facts.  If, on any day during the calendar
 
 5 year, there is a change in the employee's marital or reciprocal
 
 6 beneficiary status and though previously not entitled to make a
 
 7 joint return the employee now is so entitled, or the number of
 
 8 exemptions to which the employee is entitled is greater than the
 
 9 number of exemptions claimed, the employee may furnish the
 
10 employer with a new certificate showing the employee's present
 
11 marital or reciprocal beneficiary status, or relating to the
 
12 number of exemptions which the employee then claims, which shall
 
13 in no event exceed the number to which the employee is entitled
 
14 on the basis of the existing facts.
 
15      Such certificate shall take effect at the times set forth in
 
16 the Internal Revenue Code.
 
17      (g)  In determining the deduction allowed by subsection
 
18 (c)(4) an employee shall be entitled to withholding allowances or
 
19 additional reductions in withholding under this subsection.  In
 
20 determining the number of additional withholding allowances or
 
21 the amount of additional reductions in withholding under this
 
22 subsection, the employee may take into account (to the extent and
 
23 in the manner provided by rules) estimated itemized deductions
 

 
a                                                     GOV-14(99)
Page 44                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 and tax credits allowable under this chapter; and such additional
 
 2 deductions and other items as may be specified by the director in
 
 3 rules.  For the purposes of this subsection a fractional number
 
 4 shall not be taken into account unless it amounts to one-half or
 
 5 more, in which case it shall be increased to the next whole
 
 6 number.
 
 7      (1)  As used in this subsection, unless the context
 
 8           otherwise requires:
 
 9           (A)  "Estimated itemized deductions" means the
 
10                aggregate amount which the employee reasonably
 
11                expects will be allowed as deductions under
 
12                sections 235-2.3, 235-2.4, and 235-7, other than
 
13                the deductions referred to in Internal Revenue
 
14                Code section 151 and those deductions required to
 
15                be taken into account in determining adjusted
 
16                gross income under Internal Revenue Code section
 
17                62(a) (with the exception of paragraph 10 thereof)
 
18                for the estimation year.  In no case shall the
 
19                aggregate amount be greater than the sum of:
 
20                (i)  The amount of the deductions reflected in the
 
21                     employee's net income tax return for the
 
22                     taxable year preceding the estimation year of
 
23                     (if a return has not been filed for the
 

 
a                                                     GOV-14(99)
Page 45                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1                     preceding taxable year at the time the
 
 2                     withholding exemption certificate is
 
 3                     furnished the employer) the second taxable
 
 4                     year preceding the estimation year; or
 
 5               (ii)  The amount of estimated itemized deductions
 
 6                     and tax credits allowable under this chapter
 
 7                     and any additional deductions to which
 
 8                     entitled; and
 
 9              (iii)  The amount of the employee's determinable
 
10                     additional deductions for the estimation
 
11                     year.
 
12           (B)  "Estimated wages" means the aggregate amount which
 
13                the employee reasonably expects will constitute
 
14                wages for the estimation year;
 
15           (C)  "Determinable additional deductions" means those
 
16                estimated itemized deductions which:
 
17                (i)  Are in excess of the deductions referred to
 
18                     in subparagraph (A) reflected on the
 
19                     employee's net income tax return for the
 
20                     taxable year preceding the estimation year;
 
21                     and
 
22               (ii)  Are demonstrably attributable to an
 
23                     identifiable event during the estimation year
 

 
a                                                     GOV-14(99)
Page 46                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1                     or the preceding taxable year which can
 
 2                     reasonably be expected to cause an increase
 
 3                     in the amount of such deductions on the net
 
 4                     income tax return for the estimation year.
 
 5           (D)  "Estimation year", in the case of an employee who
 
 6                files the employee's return on the basis of a
 
 7                calendar year, means the calendar year in which
 
 8                the wages are paid; provided that in the case of
 
 9                an employee who files the employee's return on a
 
10                basis other than the calendar year, the employee's
 
11                estimation year, and the amounts deducted and
 
12                withheld to be governed by the estimation year,
 
13                shall be determined under rules prescribed by the
 
14                director of taxation.
 
15      (2)  Under this subsection, the following special rules
 
16           shall apply:
 
17           (A)  Married individuals[.] and reciprocal
 
18                beneficiaries.  The number of withholding
 
19                allowances to which a husband and wife or
 
20                reciprocal beneficiaries are entitled under this
 
21                subsection shall be determined on the basis of
 
22                their combined wages and deductions.  This
 
23                subparagraph shall not apply to a husband and wife
 

 
a                                                     GOV-14(99)
Page 47                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1                or reciprocal beneficiaries who filed separate
 
 2                returns for the taxable year preceding the
 
 3                estimation year and who reasonably expect to file
 
 4                separate returns for the estimation year;
 
 5           (B)  Limitation.  In the case of employees whose
 
 6                estimated wages are at levels at which the amounts
 
 7                deducted and withheld under this chapter generally
 
 8                are insufficient (taking into account a reasonable
 
 9                allowance for deductions and exceptions) to offset
 
10                the liability for tax under this chapter with
 
11                respect to the wages from which the amounts are
 
12                deducted and withheld, the director may by rule
 
13                reduce the withholding allowances to which those
 
14                employees would, but for this subparagraph, be
 
15                entitled under this subsection;
 
16           (C)  Treatment of allowances.  For purposes of this
 
17                chapter, any withholding allowance under this
 
18                subsection shall be treated as if it were
 
19                denominated a withholding exemption.
 
20      (3)  The director may prescribe tables by rule under chapter
 
21           91 pursuant to which employees shall determine the
 
22           number of withholding allowances to which they are
 
23           entitled under this subsection."
 

 
a                                                     GOV-14(99)
Page 48                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1      SECTION 20.  Section 235-93, Hawaii Revised Statutes, is
 
 2 amended to read as follows:
 
 3      "s 235-93  Joint returns.(a)  A husband and wife or
 
 4 reciprocal beneficiaries, having that status for purposes of the
 
 5 Internal Revenue Code and entitled to make a joint federal return
 
 6 for the taxable year, may make a single return jointly of taxes
 
 7 under this chapter for the taxable year.  In that case the tax
 
 8 shall be computed on their aggregate income as provided in
 
 9 section 235-52, and the liability with respect to the tax shall
 
10 be joint and several.  For purposes of this chapter "aggregate
 
11 income" means the income of both spouses or reciprocal
 
12 beneficiaries without regard to source in the State.
 
13      (b)  If an individual has filed a separate return for a
 
14 taxable year for which a joint return could have been made by the
 
15 taxpayer and the taxpayer's spouse[,] or reciprocal beneficiary,
 
16 an election thereafter to make a joint return for the taxable
 
17 year shall be made only upon compliance with rules of the
 
18 department of taxation, which may limit the election and
 
19 prescribe the terms and provisions applicable in such cases as
 
20 nearly as may be in conformity with the Internal Revenue Code.
 
21      (c)  The filing of a joint return after the individual has
 
22 filed a separate return without full payment of the amount shown
 
23 as tax on the joint return may be elected; provided all other
 

 
a                                                     GOV-14(99)
Page 49                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 requirements for the filing of a joint return under this section
 
 2 and the rules of the department are complied with."
 
 3      SECTION 21.  Section 235-93.5, Hawaii Revised Statutes, is
 
 4 amended to read as follows:
 
 5      "[[]235-93.5[]]  Innocent spouse or reciprocal beneficiary
 
 6 relieved of liability in certain cases.(a)  If a husband and
 
 7 wife or reciprocal beneficiaries have made a joint return under
 
 8 this chapter for a taxable year, and:
 
 9      (1)  On the return there is a substantial understatement of
 
10           tax attributable to grossly erroneous items of one
 
11           spouse[,] or reciprocal beneficiary,
 
12      (2)  The innocent spouse or reciprocal beneficiary
 
13           establishes that in signing the return the innocent
 
14           spouse or reciprocal beneficiary did not know, and had
 
15           no reason to know, that there was a substantial
 
16           understatement, and
 
17      (3)  Taking into account all the facts and circumstances, it
 
18           is inequitable to hold the innocent spouse or
 
19           reciprocal beneficiary liable for the deficiency in tax
 
20           for the taxable year attributable to the substantial
 
21           understatement,
 
22 then the innocent spouse or reciprocal beneficiary shall be
 
23 relieved of liability for tax (including interest, penalties, and
 

 
a                                                     GOV-14(99)
Page 50                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 other amounts) for the taxable year to the extent the liability
 
 2 is attributable to the substantial understatement.
 
 3      (b)  If the spouse's or reciprocal beneficiary's adjusted
 
 4 gross income for the preadjustment year is $20,000 or less, this
 
 5 section shall apply only if the liability described in subsection
 
 6 (a) is greater than ten per cent of the spouse's or reciprocal
 
 7 beneficiary adjusted gross income.  If the spouse's or reciprocal
 
 8 beneficiary's adjusted gross income for the preadjustment year is
 
 9 more than $20,000, this section shall apply only if the liability
 
10 described in subsection (a) is greater than twenty-five per cent
 
11 of the spouse's or reciprocal beneficiary's adjusted gross
 
12 income.  If the spouse is married to another spouse or the
 
13 reciprocal beneficiary enters a new reciprocal beneficiary
 
14 relationship at the close of the preadjustment year, the spouse's
 
15 or reciprocal beneficiary's adjusted gross income shall include
 
16 the income of the new spouse or reciprocal beneficiary (whether
 
17 or not they file a joint return).
 
18      (c)  For purposes of this section,
 
19      "Grossly erroneous items" mean, with respect to any spouse,
 
20 any item of gross income attributable to the spouse which is
 
21 omitted from gross income and any claim of a deduction, credit,
 
22 or basis by the spouse in an amount for which there is no basis
 
23 in fact or law.
 

 
a                                                     GOV-14(99)
Page 51                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1      "Preadjustment year" means the most recent taxable year of
 
 2 the spouse ending before the date the deficiency notice is
 
 3 mailed.
 
 4      "Substantial understatement" means any understatement which
 
 5 exceeds $500.
 
 6      "Understatement" means the excess of:
 
 7      (1)  The amount of the tax required to be shown on the
 
 8           return for the taxable year, over
 
 9      (2)  The amount of the tax imposed which is shown on the
 
10           return, reduced by any abatement, credit, refund, or
 
11           other repayment, as was made on the ground that the tax
 
12           imposed by this chapter was less than the excess of the
 
13           amount which is the sum of:
 
14           (A)  The amount shown as the tax on the taxpayer's
 
15                return, if a return was made by the taxpayer and
 
16                an amount was shown as tax by the taxpayer on the
 
17                return, plus
 
18           (B)  The amounts previously assessed (or collected
 
19                without assessment) as a deficiency,
 
20           over the abatements, credits, refunds, or other
 
21           repayments previously made."
 
22      SECTION 22.  Section 235-97, Hawaii Revised Statutes, is
 
23 amended by amending subsection (a) to read as follows:
 

 
a                                                     GOV-14(99)
Page 52                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1      "235-97  Estimates; tax payments; returns.(a) (1)
 
 2 Individuals, corporations (including S corporations), estates,
 
 3 and trusts, shall annually furnish the department of taxation
 
 4 with a declaration of estimated tax for the current taxable year.
 
 5 Declarations of estimated tax, except as otherwise provided by
 
 6 rule, shall be governed by the provisions as to returns contained
 
 7 in sections 235-94, 235-98, 235-99, and 235-128.  The
 
 8 declarations shall be made on estimated tax payment voucher
 
 9 forms.  The payment voucher shall be filed, in the case of
 
10 taxpayers on the calendar year basis, on or before April 20.  In
 
11 the case of a husband and wife who are entitled to submit a joint
 
12 payment voucher for federal purposes, or in the case of
 
13 reciprocal beneficiaries, a single payment voucher may be
 
14 submitted by them jointly, in which case the liability with
 
15 respect to the estimated tax shall be joint and several; if a
 
16 joint payment voucher is submitted but a joint income tax return
 
17 is not made for the taxable year, the estimated tax for the year
 
18 may be treated as the estimated tax of either the husband or the
 
19 wife or reciprocal beneficiaries or may be divided between them.
 
20      (2)  Each taxpayer shall transmit, with the payment voucher,
 
21           payment of one-quarter of the estimated tax for the
 
22           current taxable year.  In determining this quarterly
 
23           payment and all other installments, there first shall
 

 
a                                                     GOV-14(99)
Page 53                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1           be deducted from the total estimated tax the amount of
 
 2           estimated tax withholding or collection at source for
 
 3           the taxable year.  Thereafter, on the twentieth day of
 
 4           June and September, the taxpayer shall transmit with
 
 5           the payment voucher, payment of one-quarter of the
 
 6           estimated tax.  The fourth quarter payment of the
 
 7           estimated tax shall be transmitted with the payment
 
 8           voucher by January 20 of the year following the taxable
 
 9           year for which the estimate was made.
 
10      (3)  Taxpayers operating on a fiscal year basis shall make
 
11           similar estimates and tax payments, on or before the
 
12           twentieth day of the fourth month of the fiscal year
 
13           and periodically thereafter so as to conform to the
 
14           payments and returns required in the case of those on a
 
15           calendar year basis.
 
16      (4)  The department by rule may excuse individuals from
 
17           filing an estimate in those cases where the gross
 
18           income and exemptions are such that no tax is expected
 
19           to accrue under this chapter, or are such that
 
20           substantially all the tax will be collected through tax
 
21           withholding or at the source.
 
22      (5)  In the case of a foreign corporation, the department
 
23           may excuse the filing of an estimate and the payment of
 

 
a                                                     GOV-14(99)
Page 54                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1           estimated tax if it is satisfied that less than fifteen
 
 2           per cent of the corporation's business for the taxable
 
 3           year will be attributable to the State.  For the
 
 4           purposes of this paragraph, fifteen per cent of a
 
 5           corporation's business shall be deemed attributable to
 
 6           the State if fifteen per cent or more of the entire
 
 7           gross income of the corporation (which for the purposes
 
 8           of this paragraph means gross income computed without
 
 9           regard to source in the State) is attributable to the
 
10           State under sections 235-21 to 235-39 or other
 
11           provisions of this chapter.
 
12      (6)  In the case of a taxpayer whose tax liability is less
 
13           than $500, the filing of an estimate and the payment of
 
14           estimated tax shall not be required."
 
15      SECTION 23.  Section 235-102.5, Hawaii Revised Statutes, is
 
16 amended to read as follows:
 
17      "235-102.5  Income check-off authorized.  Any individual
 
18 whose state income tax liability for any taxable year is $2 or
 
19 more may designate $2 of the liability to be paid over to the
 
20 Hawai`i election campaign fund, any other law to the contrary
 
21 notwithstanding, when submitting a state income tax return to the
 
22 department of taxation.  In the case of a joint return of a
 
23 husband and wife or reciprocal beneficiary having a state income
 

 
a                                                     GOV-14(99)
Page 55                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 tax liability of $4 or more, each spouse or reciprocal
 
 2 beneficiary may designate that $2 be paid to the fund.  The
 
 3 director of taxation shall revise the individual state income tax
 
 4 form to allow the designation of contributions to the fund on the
 
 5 face of the tax return and immediately above the signature lines.
 
 6 An explanation shall be included which clearly states that the
 
 7 check-off does not constitute an additional tax liability.  If no
 
 8 designation was made on the original tax return when filed, a
 
 9 designation may be made by the individual on an amended return
 
10 filed within twenty months and ten days after the due date for
 
11 the original return for such taxable year.  A designation once
 
12 made whether by an original or amended return may not be
 
13 revoked."
 
14      SECTION 24.  Section 246-26, Hawaii Revised Statutes, is
 
15 amended to read as follows:
 
16      "246-26  Homes.(a)  Real property owned and occupied only
 
17 as an individual's or their principal home as of the date of
 
18 assessment by any individual or individuals, shall be exempt only
 
19 to the following extent from property taxes:
 
20      (1)  Totally exempt where the value of the property is not
 
21           in excess of $12,000;
 
22      (2)  Where the value of the property is in excess of
 
23           $12,000, the exemption shall be the amount of $12,000.
 

 
a                                                     GOV-14(99)
Page 56                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1      Provided:
 
 2           (A)  That no such exemption shall be allowed to any
 
 3                corporation, copartnership, or company;
 
 4           (B)  That the exemption shall not be allowed on more
 
 5                than one home for any one taxpayer;
 
 6           (C)  That where the taxpayer has acquired the
 
 7                taxpayer's home by a deed made on or after July 1,
 
 8                1951, the deed shall have been recorded on or
 
 9                before December 31 immediately preceding the year
 
10                for which the exemption is claimed;
 
11           (D)  That a husband and wife or reciprocal
 
12                beneficiaries shall not be permitted exemption of
 
13                separate homes owned by each of them, unless they
 
14                are living separate and apart, in which case they
 
15                shall be entitled to one exemption, to be
 
16                apportioned between each of their respective homes
 
17                in proportion to the value thereof; and
 
18           (E)  That a person living on premises, a portion of
 
19                which is used for commercial purposes, shall not
 
20                be entitled to an exemption with respect to such
 
21                portion, but shall be entitled to an exemption
 
22                with respect to the portion thereof used
 
23                exclusively as a home.
 

 
a                                                     GOV-14(99)
Page 57                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1      (b)  The use of a portion of any building or structure for
 
 2 the purpose of drying coffee and the use of a portion of real
 
 3 property, including structures, in connection with the planting
 
 4 and growing for commercial purposes, or the packing and
 
 5 processing for such purposes, of flowers, plants, or foliage,
 
 6 shall not affect the exemptions provided for by this section.
 
 7      (c)  Where two or more individuals jointly, by the entirety,
 
 8 or in common own or lease land on which their homes are located,
 
 9 each home, if otherwise qualified for the exemption granted by
 
10 this section, shall receive the exemption.  If a portion of land
 
11 held jointly, by the entirety, or in common by two or more
 
12 individuals is not qualified to receive an exemption, such
 
13 disqualification shall not affect the eligibility for an
 
14 exemption or exemptions of the remaining portion.
 
15      (d)  A taxpayer who is sixty years of age or over and who
 
16 qualifies under subsection (a) shall be entitled to one of the
 
17 following multiples of home exemption:
 
18                 Multiple to be Used in Computing
 
19       Age of Taxpayer               Home Exemption Amount
 
20 -----------------------------  --------------------------------
 
21 60 years of age or over but
 
22    not 70 years of age or over                2.0
 
23 70 years of age or over                       2.5
 

 
a                                                     GOV-14(99)
Page 58                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 For the purpose of this subsection, a husband and wife or
 
 2 reciprocal beneficiaries who own property jointly, by the
 
 3 entirety or in common, on which a home exemption under the
 
 4 provisions of subsection (a) has been granted shall be entitled
 
 5 to the applicable multiple of home exemption set forth above when
 
 6 at least one of the spouses or reciprocal beneficiaries qualifies
 
 7 each year for the applicable multiple of home exemption."
 
 8      SECTION 25.  Section 246-27, Hawaii Revised Statutes, is
 
 9 amended to read as follows:
 
10      "246-27  Home, lease, lessees defined.  For the purpose of
 
11 section 246-26, the word "home" includes:
 
12      (1)  The entire homestead when it is occupied by the
 
13           taxpayer as such;
 
14      (2)  A residential building on land held by the lessee or
 
15           the lessee's successor in interest under a lease for a
 
16           term of five years or more for residential purposes and
 
17           owned and used as a residence by the lessee or the
 
18           lessee's successor in interest, where the lease and any
 
19           extension, renewal, assignment, or agreement to assign
 
20           the lease, have been duly entered into and recorded
 
21           prior to January 1 preceding the tax year for which the
 
22           exemption is claimed, and whereby the lessee agrees to
 
23           pay all taxes during the term of the lease;
 

 
a                                                     GOV-14(99)
Page 59                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1      (3)  An apartment which is a living unit (held under a
 
 2           proprietary lease by the tenant thereof) in a multiunit
 
 3           residential building on land held by a cooperative
 
 4           apartment corporation (of which the proprietary lessee
 
 5           of such living unit is a stockholder) under a lease for
 
 6           a term of five years or more for residential purposes
 
 7           and which apartment is used as a residence by the
 
 8           lessee-stockholder, where the lease and any extension
 
 9           or renewal have been duly entered into and recorded
 
10           prior to January 1 preceding the tax year for which the
 
11           exemption is claimed, and whereby the lessee-
 
12           stockholder agrees to pay all taxes during the term of
 
13           the lease provided that:
 
14           (A)  The exemption shall not be allowed in respect to
 
15                any cooperative apartment unit where the owner of
 
16                the cooperative apartment unit claims exemption on
 
17                a home or other cooperative apartment unit; and
 
18           (B)  The owner or owners of a cooperative apartment
 
19                building or premises shall not be permitted
 
20                exemptions where a husband and wife owner of a
 
21                cooperative apartment unit own separate
 
22                cooperative apartment units or separate homes
 
23                owned by each of them, unless they are living
 

 
a                                                     GOV-14(99)
Page 60                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1                separate and apart, in which case the owner of the
 
 2                cooperative apartment or premises shall be
 
 3                entitled to one-half of one exemption;
 
 4      (4)  An apartment in a multiunit apartment building which is
 
 5           occupied by the owner of the entire apartment building
 
 6           as the owner's residence, provided that:
 
 7           (A)  The exemption shall not be allowed in respect to
 
 8                any apartment owner who claims any other home
 
 9                exemption; and
 
10           (B)  A husband or wife or reciprocal beneficiary owner
 
11                of the aforementioned type of apartment shall not
 
12                be allowed a full exemption where the husband and
 
13                wife or reciprocal beneficiaries are living
 
14                separate and apart and each is maintaining an
 
15                apartment or home entitled to an exemption, in
 
16                which case they shall be entitled to one exemption
 
17                to be apportioned between each of their respective
 
18                homes in proportion to the value thereof;
 
19      (5)  That portion of a residential duplex and that portion
 
20           of land appurtenant to the duplex which are occupied by
 
21           the owner of the duplex and land as the owner's
 
22           residence, provided that:
 
23           (A)  The exemption shall not be allowed in respect to
 

 
a                                                     GOV-14(99)
Page 61                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1                any duplex owner who claims any other home
 
 2                exemption;
 
 3           (B)  The portion of the appurtenant land shall not be
 
 4                exempt unless owned in fee by the duplex owner;
 
 5                and
 
 6           (C)  A husband or wife or reciprocal beneficiary owner
 
 7                of the duplex shall not be allowed a full
 
 8                exemption where the husband and wife or reciprocal
 
 9                beneficiaries are living separate and apart and
 
10                each is maintaining a duplex or home entitled to
 
11                an exemption, in which case they shall be entitled
 
12                to one exemption to be apportioned between each of
 
13                their respective homes in proportion to the value
 
14                thereof;
 
15      (6)  Premises held under an agreement to purchase the same
 
16           for a home, where the agreement has been duly entered
 
17           into and recorded prior to January 1 preceding the tax
 
18           year for which the exemption is claimed, whereby the
 
19           purchaser agrees to pay all taxes while purchasing the
 
20           premises;
 
21      (7)  An apartment which is a living unit (held under a lease
 
22           by the tenant thereof) in a multiunit residential
 
23           building used for retirement purposes under a lease for
 

 
a                                                     GOV-14(99)
Page 62                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1           a term to last during the lifetime of the lessee and
 
 2           his or her surviving spouse or reciprocal beneficiary
 
 3           and which apartment is used as a residence by the
 
 4           lessee and his or her surviving spouse[,] or reciprocal
 
 5           beneficiary, and where the apartment unit reverts back
 
 6           to the lessor upon the death of the lessee and his or
 
 7           her surviving spouse[,] or reciprocal beneficiary, and
 
 8           where the lease has been duly entered into and recorded
 
 9           prior to January 1 preceding the tax year for which the
 
10           exemption is claimed, and whereby the lessee agrees to
 
11           pay all taxes during the term of the lease.
 
12      The subletting by the taxpayer of not more than one room to
 
13 a tenant shall not affect the exemption provided for by section
 
14 246-26.
 
15      As used in section 246-26, in the first paragraph of section
 
16 246-4, and in section 246-23, the word "lease" shall be deemed to
 
17 include a sublease, and the word "lessee" shall be deemed to
 
18 include a sublessee."
 
19      SECTION 26.  Section 246-29, Hawaii Revised Statutes, is
 
20 amended to read as follows:
 
21      "246-29  Homes of totally disabled veterans.  Real property
 
22 owned and occupied as a home by any person who is totally
 
23 disabled due to injuries received while on duty with the armed
 

 
a                                                     GOV-14(99)
Page 63                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 forces of the United States, or owned by any such person together
 
 2 with his or her spouse or reciprocal beneficiary and occupied by
 
 3 either or both spouses or reciprocal beneficiaries as a home, or
 
 4 owned and occupied by a widow or widower or reciprocal
 
 5 beneficiaries of such totally disabled veteran who shall remain
 
 6 unmarried and who shall continue to own and occupy the premises
 
 7 as a home, is hereby exempted from all property taxes, other than
 
 8 special assessments, provided:
 
 9      (1)  That such total disability was incurred while on duty
 
10           as a member of the armed forces of the United States,
 
11           and that the department of taxation may require proof
 
12           of total disability;
 
13      (2)  That the home exemption shall be granted only as long
 
14           as the veteran claiming exemption remains totally
 
15           disabled;
 
16      (3)  That the exemption shall not be allowed on more than
 
17           one house for any one person;
 
18      (4)  That a person living on premises, a portion of which is
 
19           used for commercial purposes, shall not be entitled to
 
20           an exemption with respect to such portion, but shall be
 
21           entitled to an exemption with respect to the portion
 
22           used exclusively as a home; provided that this
 
23           exemption shall not apply to any structure, including
 

 
a                                                     GOV-14(99)
Page 64                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1           the land thereunder, which is used for commercial
 
 2           purposes.
 
 3      For the purposes of this section, the word "home" includes
 
 4 the entire homestead when it is occupied by a qualified totally
 
 5 disabled veteran as a home; houses where the disabled veteran
 
 6 owner sublets not more than one room to a tenant; and premises
 
 7 held under an agreement to purchase the same for a home, where
 
 8 the agreement has been duly entered into and recorded prior to
 
 9 January 1 preceding the tax year for which exemption is claimed,
 
10 whereby the purchaser agrees to pay all taxes while purchasing
 
11 the premises."
 
12      SECTION 27.  Section 247-6, Hawaii Revised Statutes, is
 
13 amended to read as follows:
 
14      "(b)  No certificate is required to be filed for any
 
15 document or instrument made exempt by section 247-3, except that
 
16 in the following situations, a certificate shall be filed in the
 
17 manner and place which the director shall prescribe, within
 
18 ninety days after the transaction or prior to the recordation or
 
19 filing of the document or instrument with the registrar of
 
20 conveyances or the assistant registrar of the land court or after
 
21 such period, recordation, or filing as the director shall
 
22 prescribe:
 
23      (1)  In the case of any document or instrument described
 

 
a                                                     GOV-14(99)
Page 65                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1           under section 247-3(3), any party to the document or
 
 2           instrument shall file a certificate declaring that the
 
 3           document or instrument merely confirms or corrects a
 
 4           deed, lease, sublease, assignment, transfer, or
 
 5           conveyance previously recorded or filed.
 
 6      (2)  In the case of any document or instrument described
 
 7           under section 247-3(4), any party to the document or
 
 8           instrument shall file a certificate declaring the
 
 9           amount of the nominal consideration paid and marital,
 
10           reciprocal beneficiary, or parental relationship of the
 
11           parties.
 
12      (3)  In the case of any document or instrument described
 
13           under section 247-3(5), any party to the document or
 
14           instrument shall file a certificate declaring the
 
15           reasons why the consideration is $100 or less.
 
16      (4)  In the case of any document or instrument described in
 
17           section 247-3(6), any party to the document or
 
18           instrument shall file a certificate declaring that the
 
19           document or instrument is made pursuant to an agreement
 
20           of sale, and where applicable, an assignment or
 
21           assignments of agreements of sale.
 
22      (5)  In the case of any document or instrument described
 
23           under section 247-3(8), any person made a party to the
 

 
a                                                     GOV-14(99)
Page 66                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1           document or instrument as grantee, assignee, or
 
 2           transferee shall file a certificate declaring the full
 
 3           and actual consideration of the property transferred.
 
 4      (6)  In the case of any document or instrument described
 
 5           under section 247-3(11), any party to the document or
 
 6           instrument shall file a certificate declaring each
 
 7           owner's:
 
 8           (A)  Undivided interest in the real property and the
 
 9                value of that interest before partition; and
 
10           (B)  Proportionate interest and the value of that
 
11                interest after partition.
 
12      (7)  In the case of any document or instrument described
 
13           under section 247-3(12), any party to the document or
 
14           instrument shall file a certificate declaring that the
 
15           document or instrument is made pursuant to an order of
 
16           the court and containing the court case number.
 
17      (8)  In the case of any document or instrument described
 
18           under section 247-3(13), any party to the document or
 
19           instrument shall file a certificate declaring that the
 
20           document or instrument conveys real property from a
 
21           testamentary trust to a trust beneficiary.
 
22      (9)  In the case of any document or instrument described
 
23           under section 247-3(14), any party to the document or
 

 
a                                                     GOV-14(99)
Page 67                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1           instrument shall file a certificate declaring that the
 
 2           document or instrument conveys real property from the
 
 3           grantor to a grantor's revocable living trust or from a
 
 4           grantor's revocable living trust to the grantor."
 
 5      SECTION 28.  Section 326-26, Hawaii Revised Statutes, is
 
 6 amended by amending subsection (b) to read as follows:
 
 7      "(b) Notwithstanding subsection (a), upon the request of a
 
 8 patient, the non-patient-spouse or non-patient-reciprocal
 
 9 beneficiary of a patient residing at Kalaupapa shall be allowed
 
10 to reside with the patient-spouse or patient-reciprocal
 
11 beneficiary at Kalaupapa.  The non-patient-spouse or non-patient-
 
12 reciprocal beneficiary shall not be entitled to receive any
 
13 services or benefits accorded specifically to Hansen's disease
 
14 patients at Kalaupapa."
 
15      SECTION 29.  Section 327D-3, Hawaii Revised Statutes, is
 
16 amended by amending subsection (b) to read as follows:
 
17      "(b)  The declaration made pursuant to this chapter:
 
18      (1)  Shall be in writing;
 
19      (2)  Shall be signed by the person making the declaration,
 
20           or by another person in the declarant's presence and at
 
21           the declarant's expressed direction;
 
22      (3)  Shall be dated; and
 
23      (4)  Shall be signed in the presence of two or more
 

 
a                                                     GOV-14(99)
Page 68                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1           witnesses who:
 
 2           (A)  Are at least 18 years of age;
 
 3           (B)  Are not related to the declarant by blood,
 
 4                marriage, or a reciprocal beneficiary
 
 5                relationship, or adoption; and
 
 6           (C)  Are not, at the time that the declaration is
 
 7                executed, attending physicians, employees of an
 
 8                attending physician, or employees of a health care
 
 9                facility in which the declarant is a patient.
 
10      (5)  Shall have all signatures notarized at the same time."
 
11      SECTION 30.  Section 327D-4, Hawaii Revised Statutes, is
 
12 amended to read as follows:
 
13      "327D-4  Declaration sample form.  The following
 
14 declaration sample form may be copied and used by filling in the
 
15 blanks or may be changed to add more individualized instructions;
 
16 or an entirely different format may be used to provide health
 
17 care instructions.
 
18                            DECLARATION
 
19 A.   Statement of Declarant
 
20           Declaration made this __________ day of __________
 
21 (month, year).  I, __________, being of sound mind, and
 
22 understanding that I have the right to request that my life be
 
23 prolonged to the greatest extent possible, wilfully and
 

 
a                                                     GOV-14(99)
Page 69                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 voluntarily make known my desire that my dying shall not be
 
 2 artificially prolonged under the circumstances set forth below,
 
 3 and do hereby declare:
 
 4      My instructions shall prevail even if they create a conflict
 
 5 with the desires of my relatives (including reciprocal), hospital
 
 6 policies, or the principles of those providing my care.
 
 7      If I should develop a terminal condition or a permanent loss
 
 8 of the ability to communicate concerning medical treatment
 
 9 decisions, with no reasonable chance of regaining this ability, I
 
10 do not want to have my life prolonged.  I would not want to be
 
11 subjected to surgery or resuscitation.  Nor would I then wish to
 
12 have life sustaining medicine or procedures.  Instead, I request
 
13 care, including medicine and procedures, for the purpose of
 
14 providing comfort and pain relief.
 
15                             CHECKLIST
 
16      I have also considered whether I want tube feeding to be
 
17 provided and have selected one of the following provisions by
 
18 putting a mark in the space provided:
 
19      ( ) I do NOT want my life prolonged by tube or other
 
20 artificial feeding or provision of fluids by a tube if my
 
21 condition is as stated above.
 
22      ( ) I DO want my life prolonged by tube or other artificial
 
23 feeding and provision of fluids by a tube if my condition is as
 

 
a                                                     GOV-14(99)
Page 70                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 stated above.
 
 2 If neither provision is selected or if both are selected, it
 
 3 shall be presumed that tube or other artificial feeding or
 
 4 provision of fluids by a tube are requested to prolong the
 
 5 declarant's life.
 
 6      This declaration shall control in all circumstances.
 
 7      I understand the full import of this declaration and I am
 
 8 emotionally and mentally competent to make this declaration.
 
 9      *9486 Signed __________
 
10      Address __________
 
11 B.   Statement of Witnesses
 
12      I am at least 18 years of age and
 
13      -not related to the declarant by blood, marriage, a
 
14      reciprocal beneficiary relationship, or adoption; and
 
15      -not currently the attending physician, an employee of the
 
16      attending physician, or an employee of the health care
 
17      facility in which the declarant is a patient.
 
18      The declarant is personally known to me and I believe the
 
19 declarant to be of sound mind.
 
20      Witness __________
 
21      Address __________
 
22      Witness __________
 
23      Address __________
 

 
a                                                     GOV-14(99)
Page 71                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 C.   Notarization
 
 2      Subscribed, sworn to and acknowledged before me by
 
 3 __________, the declarant, and subscribed and sworn to before me
 
 4 by __________ and __________, witnesses, this ___ day of
 
 5 __________, 19 ___.
 
 6 
 
 7 (SEAL)                    Signed  ______________________________
 
 8                                   ------------------------------
 
 9                                   (Official capacity of officer)"
 
10      SECTION 31.  Section 327F-3, Hawaii Revised Statutes, is
 
11 amended by amending subsection (b) to read as follows:
 
12      "(b)  The declaration made pursuant to this chapter:
 
13      (1)  Shall be in writing;
 
14      (2)  Shall be signed by the person making the declaration,
 
15           or by another person in the declarant's presence and at
 
16           the declarant's expressed direction;
 
17      (3)  Shall be dated; and
 
18      (4)  Shall be signed in the presence of two or more
 
19           witnesses who:
 
20           (A)  Are at least eighteen years of age;
 
21           (B)  Are not related to the declarant by blood,
 
22                marriage, a reciprocal beneficiary relationship,
 
23                or adoption;
 

 
a                                                     GOV-14(99)
Page 72                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1           (C)  Are not, at the time the declaration is executed,
 
 2                attending physicians, employees of an attending
 
 3                physician, or employees of a health care facility
 
 4                in which the declarant is a patient."
 
 5      SECTION 32.  Section 329-1, Hawaii Revised Statutes, is
 
 6 amended by amending the definition of "ultimate user" to read as
 
 7 follows:
 
 8      ""Ultimate user" means a person who lawfully possesses a
 
 9 controlled substance for the person's own use or for the use of a
 
10 member of the person's household including reciprocal
 
11 beneficiaries or for administering to an animal owned by the
 
12 person or by a member of the person's household."
 
13      SECTION 33.  Section 334-1, Hawaii Revised Statutes, is
 
14 amended by amending the definition of "interested person" to read
 
15 as follows:
 
16      ""Interested person" means an interested, responsible adult,
 
17 including but not limited to a public official, the legal
 
18 guardian, spouse, reciprocal beneficiary, parent, legal counsel,
 
19 adult child, or next of kin of a person allegedly mentally ill,
 
20 mentally deficient or suffering from substance abuse or as
 
21 otherwise provided in Article I of chapter 560."
 
22      SECTION 34.  Section 334-10, Hawaii Revised Statutes, is
 
23 amended by amending subsection (a) to read as follows:
 

 
a                                                     GOV-14(99)
Page 73                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1      "(a)  There is established a state council on mental health.
 
 2 The council shall consist of twenty-one members appointed by the
 
 3 governor as provided in section 26-34.  In making appointments to
 
 4 the council, the governor shall ensure that all service area
 
 5 boards of the State are represented, and that a majority of the
 
 6 members are nonproviders of mental health or other health
 
 7 services, and that a majority of the members are not state
 
 8 employees.  The number of parents of children with serious
 
 9 emotional disturbances shall be sufficient to provide adequate
 
10 representation of such children in the deliberations of the
 
11 council.  The council shall be composed of residents of the
 
12 State, including individuals representing:
 
13      (1)  The principal state agencies with respect to mental
 
14           health, education, vocational rehabilitation, criminal
 
15           justice, housing, and social services;
 
16      (2)  Public and private entities concerned with the need,
 
17           planning, operation, funding, and use of mental health
 
18           services and related support services;
 
19      (3)  Adults with serious mental illnesses who are receiving,
 
20           or have received, mental health services;
 
21      (4)  The families of such adults or families of children
 
22           with serious emotional disturbances; provided that
 
23           reciprocal beneficiaries may represent families in the
 

 
a                                                     GOV-14(99)
Page 74                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1           same manner as could a spouse; and
 
 2      (5)  The Hawai`i advisory commission on drug abuse and
 
 3           controlled substances who shall be a person
 
 4           knowledgeable about the community and the relationships
 
 5           between mental health, mental illness, and substance
 
 6           abuse."
 
 7      SECTION 35.  Section 338-1, Hawaii Revised Statutes, is
 
 8 amended by amending the definition of "public health statistics"
 
 9 to read as follows:
 
10      ""Public health statistics" includes the registration,
 
11 preparation, transcription, collection, compilation, and
 
12 preservation of data pertaining to births, adoptions,
 
13 legitimations, deaths, fetal deaths, morbidity, marital or
 
14 reciprocal beneficiary status, and data incidental thereto."
 
15      SECTION 36.  Section 338-14.5, Hawaii Revised Statutes, is
 
16 amended to read as follows:
 
17      "[[]338-14.5[]]  Copies of certificate; fees.
 
18            < Text of section effective July 1, 2000 >
 
19      All fees received for the issuance of certified copies of
 
20 birth, marriage, reciprocal beneficiary, or death certificates
 
21 shall be remitted to the director of health.  Upon the receipt of
 
22 remittances under this section, the director of health shall
 
23 deposit $1.50 for each certified copy to the credit of the spouse
 

 
a                                                     GOV-14(99)
Page 75                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 and child abuse special account established under section 346-
 
 2 7.5, shall deposit $1.50 for each certified copy to the credit of
 
 3 the spouse and child abuse special account established under
 
 4 section 601-3.6, and shall deposit the remainder of the fee for
 
 5 each certified copy to the credit of the state general fund."
 
 6      SECTION 37.  Section 338-18, Hawaii Revised Statutes, is
 
 7 amended by amending subsection (b) to read as follows:
 
 8      "(b)  The department shall not permit inspection of public
 
 9 health statistics records, or issue a certified copy of any such
 
10 record or part thereof, unless it is satisfied that the applicant
 
11 has a direct and tangible interest in the record.  The following
 
12 persons shall be considered to have a direct and tangible
 
13 interest in a public health statistics record:
 
14      (1)  The registrant;
 
15      (2)  The spouse or reciprocal beneficiary of the registrant;
 
16      (3)  A parent of the registrant;
 
17      (4)  A descendant of the registrant;
 
18      (5)  A person having a common ancestor with the registrant;
 
19      (6)  A legal guardian of the registrant;
 
20      (7)  A person or agency acting on behalf of the registrant;
 
21      (8)  A personal representative of the registrant's estate;
 
22      (9)  A person whose right to inspect or obtain a certified
 
23           copy of the record is established by an order of a
 

 
a                                                     GOV-14(99)
Page 76                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1           court of competent jurisdiction;
 
 2      (10) Adoptive parents who have filed a petition for adoption
 
 3           and who need to determine the death of one or more of
 
 4           the prospective adopted child's natural or legal
 
 5           parents;
 
 6      (11) A person who needs to determine the marital status of a
 
 7           former spouse in order to determine the payment of
 
 8           alimony;
 
 9      (12) A person who needs to determine the death of a
 
10           nonrelated co-owner of property purchased under a joint
 
11           tenancy agreement; and
 
12      (13) A person who needs a death certificate for the
 
13           determination of payments under a credit insurance
 
14           policy."
 
15      SECTION 38.  Section 338-29.5, Hawaii Revised Statutes, is
 
16 amended to read as follows:
 
17      "338-29.5  Late registration of death, fetal death,
 
18 marriage, creation of reciprocal beneficiary status, and divorce.
 
19 (a)  When a death, fetal death, marriage, creation of reciprocal
 
20 beneficiary status, or divorce occurring in this State has not
 
21 been registered, a certificate may be filed in accordance with
 
22 rules adopted by the department of health.  The certificate shall
 
23 be registered subject to any evidentiary requirements that the
 

 
a                                                     GOV-14(99)
Page 77                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 department adopts by rule to substantiate the alleged facts of
 
 2 death, fetal death, marriage, creation of reciprocal beneficiary
 
 3 status, or divorce.
 
 4      (b)  Certificates of death, fetal death, marriage, creation
 
 5 of reciprocal beneficiary status, or divorce registered one year
 
 6 or more after the date of occurrence shall be marked "late" and
 
 7 shall show on the face the date of the late registration.
 
 8      (c)  As used in this section, "late" means one year or more
 
 9 after the date of the death, fetal death, marriage, creation of
 
10 reciprocal beneficiary status, or divorce."
 
11      SECTION 39.  Section 346-7.5, Hawaii Revised Statutes, is
 
12 amended by amending subsection (b) to read as follows:
 
13      "(b)  The proceeds of the account shall be reserved for use
 
14 by the department of human services for staff programs, and
 
15 grants or purchases of service, consistent with chapter 42D, that
 
16 support or provide spouse or child abuse intervention or
 
17 prevention as authorized by law.  These proceeds shall be used
 
18 for new or existing programs and shall not supplant any other
 
19 funds previously allocated to these programs.  The account shall
 
20 be kept separate and apart from all other funds in the treasury.
 
21 For purposes of this section, spouse includes a reciprocal
 
22 beneficiary."
 
23      SECTION 40.  Section 346-15, Hawaii Revised Statutes, is
 

 
a                                                     GOV-14(99)
Page 78                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 amended by amending subsection (d) to read as follows:
 
 2      "(d)  In cases where the decedent is survived by relatives,
 
 3 the relatives shall be permitted to make their own arrangements
 
 4 for the burial or cremation of their deceased relative.  For
 
 5 purposes of this section, a reciprocal beneficiary is considered
 
 6 a relative."
 
 7      SECTION 41.  Section 346-29.5, Hawaii Revised Statutes, is
 
 8 amended as follows:
 
 9      1.   By amending subsection (b) to read as follows:
 
10      "(b)  The department may place a lien against the real
 
11 property of any recipient receiving medical assistance who is an
 
12 inpatient in a nursing facility, intermediate care facility for
 
13 the mentally retarded, or other medical institution, after a
 
14 state determination, pursuant to notice and hearing requirements
 
15 of chapter 91, that the recipient cannot reasonably be expected
 
16 to be discharged from the medical institution and returned home.
 
17 There is a rebuttable presumption that the recipient cannot
 
18 reasonably be expected to be discharged from the facility and
 
19 return home if the recipient or a representative of the recipient
 
20 declares that there is no intent to return home or if the
 
21 recipient has been institutionalized for six months or longer
 
22 without a discharge plan."
 
23      (1)  The department may not place a lien on the recipient's
 

 
a                                                     GOV-14(99)
Page 79                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 home if the recipient's:
 
 2      (A)  Spouse[;] or reciprocal beneficiary;
 
 3      (B)  Minor, blind, or disabled child; or sibling who has an
 
 4           equity interest in the home and who was residing in the
 
 5           home for a period of at least one year immediately
 
 6           before the date of the recipient's admission to the
 
 7           medical institution; is lawfully residing in the home.
 
 8      (2)  The department shall not recover funds from the lien on
 
 9           the recipient's home when:
 
10           (A)  A sibling who was residing in the home for a
 
11                period of at least one year immediately before the
 
12                date of the recipient's admission to the medical
 
13                institution; or
 
14           (B)  A son or daughter who was residing in the
 
15                recipient's home for a period of at least two
 
16                years immediately before the date of the
 
17                recipient's admission to the medical institution,
 
18                and who establishes to the satisfaction of the
 
19                State that he or she provided care to the
 
20                recipient which permitted such recipient to reside
 
21                at home rather than in an institution; lawfully
 
22                resides in the home and has lawfully resided in
 
23                the home on a continuous basis since the date of
 

 
a                                                     GOV-14(99)
Page 80                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1                the recipient's admission to the medical
 
 2                institution.
 
 3      (3)  The department also shall not recover funds from the
 
 4           lien if the recipient has a surviving spouse[;] or
 
 5           reciprocal beneficiary; or surviving minor, blind, or
 
 6           disabled child.
 
 7      (4)  Any lien imposed with respect to this subsection shall
 
 8           be dissolved upon the individual's discharge from the
 
 9           medical institution and return home."
 
10      2.  By amending subsection (d) to read as follows:
 
11      "(d)  The department shall issue certificates of release or
 
12 partial release upon satisfaction or partial satisfaction of the
 
13 lien.  Certificates of release or partial release of any real
 
14 property lien issued by the director of the department or the
 
15 director's authorized representative shall be recorded in the
 
16 bureau of conveyances.  The director shall consider issuing
 
17 conditional certificates of release in cases of extreme hardship
 
18 as set out in rules adopted under chapter 91.  The registrar
 
19 shall forthwith cause the same to be indexed in the general
 
20 indexes in a like manner as the original lien.  No fee shall be
 
21 charged for any of the recording.  The lien herein provided for
 
22 shall take priority over any other lien subsequently acquired or
 
23 recorded except tax liens and except that, in the estate of a
 

 
a                                                     GOV-14(99)
Page 81                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 beneficiary, the actual funeral expenses, the expenses of the
 
 2 last sickness, the cost of administration of the estate, and any
 
 3 allowance made to the surviving spouse, reciprocal beneficiary,
 
 4 and children for their support during administration of the
 
 5 estate, shall have priority and preference over the lien herein
 
 6 imposed, and over any claim against an estate filed under section
 
 7 346-37.
 
 8      The lien shall be enforceable by the department by suit in
 
 9 the appropriate court or shall be enforceable as a claim against
 
10 the estate of the recipient under section 346-37, having priority
 
11 over all other debts except taxes, the actual funeral expenses,
 
12 the expenses of last sickness, the cost of administration of the
 
13 estate, and any allowance made to the surviving spouse,
 
14 reciprocal beneficiary, and children for their support during
 
15 administration of the estate.
 
16      The lien shall be enforceable as a claim under section 346-
 
17 37 against the estate of a recipient under any circumstances if
 
18 the estate is admitted to probate at the instance of any
 
19 interested party other than the department.
 
20      Whenever the department is satisfied that the collection of
 
21 the amount of assistance paid a recipient will not be jeopardized
 
22 or that the release or waiver of the priority of the lien against
 
23 the recipient's property, in whole or in part, is necessary to
 

 
a                                                     GOV-14(99)
Page 82                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 provide for the maintenance or support of the recipient, the
 
 2 recipient's spouse[,] or reciprocal beneficiary, or any minor or
 
 3 incapacitated child, it may release or waive the priority of the
 
 4 lien with respect to all or any part of the real property.
 
 5      The recipient, the recipient's heirs, personal
 
 6 representatives, or assigns may discharge the lien at any time by
 
 7 paying the amount thereof to the department which shall execute a
 
 8 satisfaction thereof.  The department may at its discretion
 
 9 compromise the collection of any such lien, but such compromise
 
10 shall be made only when the recipient, the recipient's heirs,
 
11 personal representatives or assigns prove that the collection of
 
12 the full amount of the lien or claim would cause undue hardship
 
13 or the lien or claim is otherwise uncollectible.
 
14      The proceeds from the enforcement, payment, or compromise of
 
15 the lien shall be paid into the treasury of the State.  If the
 
16 amount of assistance reflected by the proceeds was paid in part
 
17 by federal funds, the proper portion of these funds shall be paid
 
18 by the director of finance to the treasury of the United States.
 
19 The director of finance shall thereupon report such payment to
 
20 the department.  If the federal funds are not paid directly into
 
21 the treasury of the United States, these federal funds shall be
 
22 credited by the director of finance to the department for
 
23 expenditure for assistance without need for further
 

 
a                                                     GOV-14(99)
Page 83                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 appropriation.
 
 2      If at any time the federal government, or any agency or
 
 3 instrumentality thereof, requires, as a condition to any grant of
 
 4 assistance, the performance of conditions inconsistent with this
 
 5 section, or desisting from actions provided by this section, the
 
 6 governor may suspend, upon a finding to that effect and to the
 
 7 extent of such requirement, any provisions of this section to the
 
 8 end that such federal assistance may be received.
 
 9      The department shall submit an annual report to the
 
10 legislature, which shall include a list of liens held by the
 
11 department on real property.  This report shall include, but not
 
12 be limited to a description of the value of the liens, the legal
 
13 status of the liens and when the liens were initiated.
 
14      The department shall adopt rules pursuant to chapter 91
 
15 necessary for the purposes of this section."
 
16      SECTION 42.  Section 346-37, Hawaii Revised Statutes, is
 
17 amended:
 
18      1.  By amending subsection (a) to read as follows:
 
19      "(a)  If a recipient under this chapter dies leaving an
 
20 estate and does not have a surviving spouse, reciprocal
 
21 beneficiary, child, father, mother, grandfather, grandmother,
 
22 grandchild, stepfather, stepmother, or any designated heir, the
 
23 department shall have a valid claim against the estate for the
 

 
a                                                     GOV-14(99)
Page 84                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 amount of social services overpayments, financial assistance
 
 2 overpayments, or burial payments granted.  The department shall
 
 3 file a claim against the estate of a deceased recipient of
 
 4 medical assistance for the amount of medical assistance granted,
 
 5 only if the recipient was age fifty-five or over when such
 
 6 medical assistance was received and there is no surviving spouse,
 
 7 or surviving child who is under twenty-one years of age, or
 
 8 blind, or disabled.  The department shall file a claim against
 
 9 the estate of a recipient of medical assistance who was an
 
10 inpatient in a nursing facility, intermediate care facility for
 
11 the mentally retarded, or other medical institution only if there
 
12 is no surviving spouse, surviving reciprocal beneficiary, or
 
13 surviving child who is under twenty-one years of age, or blind,
 
14 or disabled."
 
15      2.   By amending subsection (k) to read as follows:
 
16      "(k)  For purposes of this section, the term "claimant"
 
17 shall include an injured or diseased person, the person's
 
18 guardian, or the personal representative, estate, dependents, or
 
19 survivors[,] (including a surviving reciprocal beneficiary), of
 
20 the deceased person.
 
21      SECTION 43.  Section 346-82, Hawaii Revised Statutes, is
 
22 amended to read as follows:
 
23      "346-82  Definitions.  As used in this subpart:
 

 
a                                                     GOV-14(99)
Page 85                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1      (1)  "Elder" means any person as may otherwise be defined by
 
 2           the department, who desires and needs counseling,
 
 3           guidance, and assistance to modify or resolve the
 
 4           social, economic, educational, recreational, physical,
 
 5           or mental problem that impedes the person's personal
 
 6           functioning and well-being.
 
 7      (2)  "Day care center for elder disabled and aged persons"
 
 8           means a place maintained and operated by an individual,
 
 9           organization, or agency for the purpose of providing
 
10           supportive and protective care to a disabled or aged
 
11           person with or without charging a fee during the
 
12           attendant working day.  The term "day care center"
 
13           includes place designated for group care for four or
 
14           more adults or a family home providing care for two or
 
15           three adults.  The term "disabled and aged persons"
 
16           refers to persons who live with a spouse, reciprocal
 
17           beneficiary, relative, or friend but who require
 
18           temporary supervision and care during the absence of
 
19           people from the home or residence.
 
20      Nothing in section 346-83 shall be construed to include a
 
21 relative caring for another relative; a neighbor or friend caring
 
22 for an adult by mutual choice and agreement; or any center or
 
23 facility conducted primarily or solely for educational, social,
 

 
a                                                     GOV-14(99)
Page 86                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 recreational, athletic or other group functions that may provide
 
 2 for twenty-four-hour boarding, personal, or nursing care
 
 3 accommodation."
 
 4      SECTION 44.  Section 346-237, Hawaii Revised Statutes, is
 
 5 amended by read as follows:
 
 6      "[[]346-237[]]  Notice of proceedings.  After a petition
 
 7 has been filed, the matter shall be set for hearing and a notice
 
 8 of hearing shall be issued to all parties to the proceeding.  The
 
 9 parties to the proceeding shall include:
 
10      (1)  The dependent adult;
 
11      (2)  Any caregiver or facility in which the dependent adult
 
12           resides or is a patient;
 
13      (3)  The spouse or reciprocal beneficiary and adult children
 
14           of the dependent adult;
 
15      (4)  The parents of the dependent adult, unless waived by
 
16           the court for good cause;
 
17      (5)  Any guardian of the person or property who may have
 
18           been appointed; and
 
19      (6)  Any other person or entity affected by the order for
 
20           immediate protection.
 
21      Where the name or whereabouts of a potential party is
 
22 unknown, the court may require the petitioner to set forth the
 
23 reasonable efforts the petitioner made to ascertain the party's
 

 
a                                                     GOV-14(99)
Page 87                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 name or whereabouts and why the petitioner has been unable to
 
 2 determine those facts."
 
 3      SECTION 45.  Section 346-267, Hawaii Revised Statutes, is
 
 4 amended to read as follows:
 
 5      "[[]346-267[]]  Case management.  The department may
 
 6 provide to a participant case management services to support and
 
 7 strengthen the participant's capacity to become self-supporting
 
 8 and to facilitate access to resources and opportunities required
 
 9 for self-support.  Case management activities may include, but
 
10 are not limited to:
 
11      (1)  Facilitating activities and services needed by a
 
12           recipient who is working toward the goal of self-
 
13           sufficiency;
 
14      (2)  Assisting the individual and the family (including
 
15           reciprocal beneficiaries to obtain services needed to
 
16           assure effective participation in the program;
 
17      (3)  Facilitating communication between the participant and
 
18           service providers;
 
19      (4)  Providing initial support, assessment, and referral to
 
20           appropriate services; and
 
21      (5)  Monitoring the participant's progress to ensure that
 
22           the individual receives required assistance in a timely
 
23           and effective manner."
 

 
a                                                     GOV-14(99)
Page 88                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1      SECTION 46.  Section 346-270, Hawaii Revised Statutes, is
 
 2 amended to read as follows:
 
 3      "[[]346-270[]]  Other support services.  The department may
 
 4 provide other supportive services, such as counseling for
 
 5 personal and family-related problems, and for one-time training
 
 6 and work-related expenses, to allow eligible individuals to
 
 7 participate in education, training, and employment.  The
 
 8 department may:
 
 9      (1)  Provide health and social services to eligible
 
10           individuals and families (including reciprocal
 
11           beneficiaries) with identified needs to assist them in
 
12           removing or controlling any barriers to successful
 
13           participation in the program.
 
14      (2)  Establish separate emergency funds to meet the one-time
 
15           training and work-related expenses necessary to allow
 
16           individuals to participate in the program.  The items
 
17           to be paid for by the emergency fund may include, but
 
18           are not limited to, initial work clothing, work tools,
 
19           safety equipment, dental and medical procedures not
 
20           covered under the medical assistance program, rental
 
21           and utility deposits not available through the welfare
 
22           grant, and limited assistance with auto repairs."
 
23      SECTION 47.  Section 368-1, Hawaii Revised Statutes, is
 

 
a                                                     GOV-14(99)
Page 89                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 amended to read as follows:
 
 2      "368-1  Purpose and intent.  The legislature finds and
 
 3 declares that the practice of discrimination because of race,
 
 4 color, religion, age, sex, sexual orientation, marital or
 
 5 reciprocal beneficiary status, national origin, ancestry, or
 
 6 disability in employment, housing, public accommodations, or
 
 7 access to services receiving state financial assistance is
 
 8 against public policy.  It is the purpose of this chapter to
 
 9 provide a mechanism which provides for a uniform procedure for
 
10 the enforcement of the State's discrimination laws.  It is the
 
11 legislature's intent to preserve all existing rights and remedies
 
12 under such laws."
 
13      SECTION 48.  Section 378-1, Hawaii Revised Statutes, is
 
14 hereby amended by amending the definition of "marital status" to
 
15 read as follows:
 
16      ""Marital or reciprocal beneficiary status" means the state
 
17 of being married or being single[.] or being in a reciprocal
 
18 beneficiary relationship."
 
19      SECTION 49.  Section 378-2, Hawaii Revised Statutes, is
 
20 amended to read as follows:
 
21      "378-2  Discriminatory practices made unlawful; offenses
 
22 defined.  It shall be an unlawful discriminatory practice:
 
23      (1)  Because of race, sex, sexual orientation, age,
 

 
a                                                     GOV-14(99)
Page 90                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1           religion, color, ancestry, disability, marital or
 
 2           reciprocal beneficiary status, or arrest and court
 
 3           record:
 
 4           (A)  For any employer to refuse to hire or employ or to
 
 5                bar or discharge from employment, or otherwise to
 
 6                discriminate against any individual in
 
 7                compensation or in the terms, conditions, or
 
 8                privileges of employment;
 
 9           (B)  For any employment agency to fail or refuse to
 
10                refer for employment, or to classify or otherwise
 
11                to discriminate against, any individual;
 
12           (C)  For any employer or employment agency to print,
 
13                circulate, or cause to be printed or circulated
 
14                any statement, advertisement, or publication or to
 
15                use any form of application for employment or to
 
16                make any inquiry in connection with prospective
 
17                employment, which expresses, directly or
 
18                indirectly, any limitation, specification, or
 
19                discrimination;
 
20           (D)  For any labor organization to exclude or expel
 
21                from its membership any individual or to
 
22                discriminate in any way against any of its
 
23                members, employer, or employees; or
 

 
a                                                     GOV-14(99)
Page 91                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1           (E)  For any employer or labor organization to refuse
 
 2                to enter into an apprenticeship agreement as
 
 3                defined in section 372-2; provided that no
 
 4                apprentice shall be less than sixteen years of
 
 5                age;
 
 6      (2)  For any employer, labor organization, or employment
 
 7           agency to discharge, expel, or otherwise discriminate
 
 8           against any individual because the individual has
 
 9           opposed any practice forbidden by this part or has
 
10           filed a complaint, testified, or assisted in any
 
11           proceeding respecting the discriminatory practices
 
12           prohibited under this part;
 
13      (3)  For any person whether an employer, employee, or not,
 
14           to aid, abet, incite, compel, or coerce the doing of
 
15           any of the discriminatory practices forbidden by this
 
16           part, or to attempt to do so;
 
17      (4)  For any employer to violate the provisions of section
 
18           121-43 relating to nonforfeiture for absence by members
 
19           of the national guard;
 
20      (5)  For any employer to refuse to hire or employ or to bar
 
21           or discharge from employment, any individual because of
 
22           assignment of income for the purpose of satisfying the
 
23           individual's child support obligations as provided for
 

 
a                                                     GOV-14(99)
Page 92                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1           under section 571-52; or
 
 2      (6)  For any employer, labor organization, or employment
 
 3           agency to exclude or otherwise deny equal jobs or
 
 4           benefits to a qualified individual because of the known
 
 5           disability of an individual with whom the qualified
 
 6           individual is known to have a relationship or
 
 7           association."
 
 8      SECTION 50.  Section 398-6, Hawaii Revised Statutes, is
 
 9 amended by amending subsection (c) to read as follows:
 
10      "(c)  When leave is to care for a child, spouse, reciprocal
 
11 beneficiary, or parent who has a serious health condition,
 
12 certification shall be issued by the health care provider of the
 
13 individual requiring care.  Certification shall be considered
 
14 sufficient if it provides information as required by the
 
15 director."
 
16      SECTION 51.  Section 421C-12, Hawaii Revised Statutes, is
 
17 amended to read as follows:
 
18      "421C-12  Bylaws; contents.  The bylaws shall contain:
 
19      (1)  The maximum amount or percentage of capital which may
 
20           be owned or controlled by one member.
 
21      (2)  A provision that in all decisions to amend the articles
 
22           or bylaws, as the case may be, the members shall be
 
23           informed of those decisions at least thirty days in
 

 
a                                                     GOV-14(99)
Page 93                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1           advance through a mailing or a prominent notice at all
 
 2           association locations.
 
 3      (3)  The method and terms of admission to membership and the
 
 4           disposal of members' interests on termination of
 
 5           membership for any reason.
 
 6      (4)  A provision that a majority of directors, or five per
 
 7           cent of the, or two hundred fifty, members, whichever
 
 8           is less, may submit a petition in writing and demand a
 
 9           special membership meeting, which shall be called by
 
10           the secretary within thirty days of that demand.
 
11      (5)  A provision that notice for all meetings shall be made
 
12           through posting prominent signs at all association
 
13           locations or by mailing to the last known address of
 
14           each member or director.  Notices for special meetings
 
15           shall specify the purpose of the meeting.
 
16      (6)  A provision that associations shall not discriminate on
 
17           their acceptance of members on a basis of race, gender,
 
18           religion, income, marital or reciprocal beneficiary
 
19           status, or nationality.
 
20      (7)  A provision that within a specified period of time any
 
21           action taken by the directors must be referred to the
 
22           members for approval or disapproval if demanded by
 
23           petition of at least five per cent of the, or two
 

 
a                                                     GOV-14(99)
Page 94                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1           hundred fifty, members, whichever is less, or by vote
 
 2           of at least a majority of the directors; provided that
 
 3           rights of third parties which have vested between the
 
 4           time of action by the directors and approval or
 
 5           disapproval by the members shall  not be impaired."
 
 6      SECTION 52.  Section 421H-2, Hawaii Revised Statutes, is
 
 7 amended by amending subsection (e) to read as follows:
 
 8      "(e)  The articles of incorporation and bylaws shall require
 
 9 a provision that there shall not be any social, political,
 
10 racial, or religious discrimination nor any discrimination on the
 
11 basis of age, sex, marital, reciprocal beneficiary, or parental
 
12 status, subject only to limitations under applicable federal,
 
13 state, or county laws, rules, or regulations."
 
14      SECTION 53.  Section 431:10-206, Hawaii Revised Statutes, is
 
15 amended to read as follows:
 
16      "431:10-206  Application for insurance:  consent of insured
 
17 required.  No life or disability insurance contract upon an
 
18 individual shall be made or effectuated unless at the time of the
 
19 making of the contract the individual insured, being of competent
 
20 legal capacity to contract, applies for or consents to the
 
21 insurance in writing, except in the following cases:
 
22      (1)  A spouse or reciprocal beneficiary may effectuate such
 
23           insurance upon the other spouse[.] or reciprocal
 

 
a                                                     GOV-14(99)
Page 95                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1           beneficiary.
 
 2      (2)  Any person having an insurable interest in the life of
 
 3           a minor, or any person upon whom a minor is dependent
 
 4           for support and maintenance, may effectuate insurance
 
 5           upon the life of or pertaining to the minor
 
 6 This section shall not apply to contracts of group life insurance
 
 7 or of group or blanket disability insurance as defined in this
 
 8 code."
 
 9      SECTION 54.  Section 431:10-232, Hawaii Revised Statutes, is
 
10 amended by amending subsections (a) and (b) to read as follows:
 
11      "(a)  All proceeds payable because of the death of the
 
12 insured and the aggregate net cash value of any or all life and
 
13 endowment policies and annuity contracts payable to a spouse or
 
14 reciprocal beneficiary of the insured, or to a child, parent, or
 
15 other person dependent upon the insured, whether the power to
 
16 change the beneficiary is reserved to the insured or not, and
 
17 whether the insured or the insured's estate is a contingent
 
18 beneficiary or not, shall be exempt from execution, attachment,
 
19 garnishment, or other process, for the debts or liabilities of
 
20 the insured incurred subsequent to May 19, 1939, except as to
 
21 premiums paid in fraud of creditors within the period limited by
 
22 law for the recovery of such payments.
 
23      (b)  When the terms of any life or endowment policy or
 

 
a                                                     GOV-14(99)
Page 96                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 annuity contract require that the proceeds thereof be retained by
 
 2 the insurer upon the death of the insured, or other maturity of
 
 3 the policy or contract, for payment to any beneficiary other than
 
 4 the insured in accordance with a settlement plan selected by the
 
 5 insured, the beneficiary shall have no right or power, nor shall
 
 6 the beneficiary be permitted by any insurer, to commute,
 
 7 encumber, assign, or otherwise anticipate the beneficiary's
 
 8 interests under the plan if the right or power is expressly
 
 9 denied the beneficiary by the terms of the contract or policy.
 
10 If the beneficiary under the settlement plan is or was the spouse
 
11 or reciprocal beneficiary of the insured, or a child, parent, or
 
12 other person dependent upon the insured, the beneficiary's
 
13 interests thereunder, in any case, shall be exempt from
 
14 execution, attachment, garnishment, or other process for the
 
15 beneficiary's debts or liabilities incurred after December 31,
 
16 1955."
 
17      SECTION 55.  Section 431:10A-103, Hawaii Revised Statutes,
 
18 is amended to read as follows:
 
19      "431:10A-103  Family coverage defined.  As used in this
 
20 part, family coverage means a policy that insures, originally or
 
21 upon subsequent amendment, an adult member of a family who shall
 
22 be deemed the policyholder and any two or more eligible members
 
23 of that family, including spouse, reciprocal beneficiary,
 

 
a                                                     GOV-14(99)
Page 97                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 dependent children or any children under a specified age which
 
 2 shall not exceed nineteen years, and any other person dependent
 
 3 upon the policyholder."
 
 4      SECTION 56.  Section 431:10A-105, Hawaii Revised Statutes,
 
 5 is amended to read as follows:
 
 6      "431:10A-105  Required provisions.  Except as provided in
 
 7 section 431:10A-107, each policy of accident and sickness
 
 8 insurance delivered or issued for delivery to any person in this
 
 9 State shall contain the provisions set forth below.  These
 
10 provisions shall be in the words in which they appear below,
 
11 provided that the insurer may substitute corresponding provisions
 
12 of different wording approved by the commissioner which are in
 
13 each instance not less favorable in any respect to the insured or
 
14 the beneficiary.  The provisions shall be preceded individually
 
15 by the specified caption, or by such appropriate individual or
 
16 group captions or subcaptions as the commissioner may approve.
 
17 The provisions are as follows:
 
18      (1)  "Entire Contract; Changes:  This policy, including the
 
19           endorsements and the attached papers, if any,
 
20           constitutes the entire contract of insurance.  No
 
21           change in this policy shall be valid until approved by
 
22           an executive officer of the insurer and unless the
 
23           approval is endorsed on or attached to this policy.  No
 

 
a                                                     GOV-14(99)
Page 98                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1           agent has authority to change this policy or to waive
 
 2           any of its provisions."
 
 3      (2)  (A)  "Time Limit on Certain Defenses:
 
 4                (i)  After three years from the date of issue of
 
 5                     this policy no misstatements, except
 
 6                     fraudulent misstatements, made by the
 
 7                     applicant in the application for this policy
 
 8                     shall be used to void this policy or to deny
 
 9                     a claim for loss incurred or disability (as
 
10                     defined in the policy) commencing after the
 
11                     expiration of the three-year period.
 
12               (ii)  No claim for loss incurred or disability (as
 
13                     defined in the policy) commencing after three
 
14                     years from the date of issue of this policy
 
15                     shall be reduced or denied on the ground that
 
16                     a disease or physical condition not excluded
 
17                     from coverage by name or specific description
 
18                     effective on the date of loss had existed
 
19                     prior to the effective date of coverage of
 
20                     this policy."
 
21           (B)  The policy provision set forth in subparagraph
 
22                (A)(i) shall not be construed to affect any legal
 
23                requirement for avoidance of a policy or denial of
 

 
a                                                     GOV-14(99)
Page 99                                                    1315
                                     S.B. NO.           
                                                        
                                                        

 
 1                a claim during the initial three-year period, nor
 
 2                to limit the application of section 431:10A-106(1)
 
 3                through (4) in the event of misstatement with
 
 4                respect to age or occupation or other insurance.
 
 5           (C)  A policy which the insured has the right to
 
 6                continue in force subject to its terms by the
 
 7                timely payment of premium until at least age fifty
 
 8                or, in the case of a policy issued after age
 
 9                forty-four, for at least five years from its date
 
10                of issue, may contain in lieu of subparagraph
 
11                (A)(i) the following provision (from which the
 
12                clause in parentheses may be omitted at the
 
13                insurer's option):  "Incontestable:  After this
 
14                policy has been in force for a period of three
 
15                years during the lifetime of the insured
 
16                (excluding any period during which the insured is
 
17                disabled), it shall become incontestable as to the
 
18                statements contained in the application."
 
19      (3)  (A)  "Grace period:  A grace period of days (insert a
 
20                number not less than seven for weekly premium
 
21                policies, ten for monthly premium policies, and
 
22                thirty-one for all other policies) will be granted
 
23                for the payment of each premium falling due after
 

 
a                                                     GOV-14(99)
Page 100                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1                the first premium, during which grace period the
 
 2                policy shall continue in force."
 
 3           (B)  A policy which contains a cancellation provision
 
 4                may add at the end of the above provision:
 
 5                "subject to the right of the insurer to cancel in
 
 6                accordance with the cancellation provision."
 
 7           (C)  A policy in which the insurer reserves the right
 
 8                to refuse any renewal shall have at the beginning
 
 9                of the above provision:  "Unless not less than
 
10                thirty days prior to the premium due date the
 
11                insurer has delivered to the insured or has mailed
 
12                to the insured's last address as shown by the
 
13                records of the insurer written notice of its
 
14                intention not to renew this policy beyond the
 
15                period for which the premium has been accepted."
 
16      (4)  (A)  "Reinstatement:  If any renewal premium is not
 
17                paid within the time granted the insured for
 
18                payment, a subsequent acceptance of premium by the
 
19                insurer or by any agent duly authorized by the
 
20                insurer to accept the premium, without requiring
 
21                in connection therewith an application for
 
22                reinstatement, shall reinstate the policy;
 
23                provided, however, that if the insurer or agent
 

 
a                                                     GOV-14(99)
Page 101                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1                requires an application for reinstatement and
 
 2                issues a conditional receipt for the premium
 
 3                tendered, the policy shall be reinstated upon
 
 4                approval of the application by the insurer or,
 
 5                lacking approval, upon the forty-fifth day
 
 6                following the date of conditional receipt unless
 
 7                the insurer has previously notified the insured in
 
 8                writing of its disapproval of the application.
 
 9                The reinstated policy shall cover only loss
 
10                resulting from accidental injury as may be
 
11                sustained after the date of reinstatement and loss
 
12                due to sickness as may begin more than ten days
 
13                after that date.  In all other respects the
 
14                insured and insurer shall have the same rights as
 
15                they had under the policy immediately before the
 
16                due date of the defaulted premium, subject to any
 
17                provisions endorsed hereon or attached hereto in
 
18                connection with the reinstatement.  Any premium
 
19                accepted in connection with the reinstatement
 
20                shall be applied to a period for which premium has
 
21                not been previously paid, but not to any period
 
22                more than sixty days prior to the date of
 
23                reinstatement."
 

 
a                                                     GOV-14(99)
Page 102                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1           (B)  The last sentence of the above provision may be
 
 2                omitted from any policy which the insured has the
 
 3                right to continue in force subject to its terms by
 
 4                the timely payment of premiums until at least age
 
 5                fifty or, in the case of a policy issued after age
 
 6                forty-four, for at least five years from its date
 
 7                of issue.
 
 8      (5)  (A)  "Notice of Claim:  Written notice of claim must be
 
 9                given to the insurer within twenty days after the
 
10                occurrence or commencement of any loss covered by
 
11                the policy, or as soon thereafter as is reasonably
 
12                possible.  Notice given by or on behalf of the
 
13                insured or the beneficiary to the insurer at
 
14                (insert the location of the office as the insurer
 
15                may designate for the purpose) or to any
 
16                authorized agent of the insurer, with information
 
17                sufficient to identify the insured, shall be
 
18                deemed notice to the insurer."
 
19           (B)  In a policy providing a loss of time benefit which
 
20                may be payable for at least two years, an insurer
 
21                may at its option insert the following between the
 
22                first and second sentences of the above provision:
 
23                "Subject to the qualification set forth below, if
 

 
a                                                     GOV-14(99)
Page 103                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1                the insured suffers loss of time on account of
 
 2                disability for which indemnity may be payable for
 
 3                at least two years, the insured shall, at least
 
 4                once in every six months after having given notice
 
 5                of claim, give to the insurer notice of
 
 6                continuance of the disability, except in the event
 
 7                of legal incapacity.  The period of six months
 
 8                following any filing of proof by the insured or
 
 9                any payment by the insurer on account of the claim
 
10                or any denial of liability in whole or in part by
 
11                the insurer shall be excluded in applying this
 
12                provision.  Delay in giving notice shall not
 
13                impair the insured's right to any indemnity which
 
14                would otherwise have accrued during the period of
 
15                six months preceding the date on which notice is
 
16                actually given."
 
17      (6)  "Claim Forms:  The insurer, upon receipt of a notice of
 
18           claim, will furnish to the claimant the forms, that are
 
19           usually furnished by it for filing proofs of loss.  If
 
20           the forms are not furnished within fifteen days after
 
21           the giving of notice the claimant shall be deemed to
 
22           have complied with the requirements of this policy as
 
23           to proof of loss upon submitting, within the time fixed
 

 
a                                                     GOV-14(99)
Page 104                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1           in the policy for filing proofs of loss, written proof
 
 2           covering the occurrence, the character, and the extent
 
 3           of the loss for which claim is made."
 
 4      (7)  "Proofs of Loss:  In case of claim for loss for which
 
 5           this policy provides any periodic payment contingent
 
 6           upon continuing loss, written proof of loss must be
 
 7           furnished to the insurer at its office within ninety
 
 8           days after the termination of the period for which the
 
 9           insurer is liable, and in case of claim for any other
 
10           loss within ninety days after the date of loss.
 
11           Failure to furnish proof of loss within the time
 
12           required shall not invalidate nor reduce any claim if
 
13           it was not reasonably possible to give proof within the
 
14           time required, provided proof is furnished as soon as
 
15           reasonably possible and in no event, except in the
 
16           absence of legal capacity, later than fifteen months
 
17           from the time proof is otherwise required."
 
18      (8)  "Time of Payment of Claims:  Indemnities payable under
 
19           this policy for any loss other than loss for which this
 
20           policy provides any periodic payment will be paid
 
21           immediately upon receipt of due written proof of loss.
 
22           Subject to due written proof of loss, all accrued
 
23           indemnities for loss for which this policy provides
 

 
a                                                     GOV-14(99)
Page 105                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1           periodic payment will be paid (insert period for
 
 2           payment which must not be less frequently than monthly)
 
 3           and any balance remaining unpaid upon the termination
 
 4           of liability will be paid immediately upon receipt of
 
 5           due written proof."
 
 6      (9)  (A)  Payment of Claims:  Indemnity for loss of life
 
 7                will be payable in accordance with the beneficiary
 
 8                designation and the provisions respecting payment
 
 9                which may be prescribed herein and effective at
 
10                the time of payment.  If no designation or
 
11                provision is then effective, the indemnity shall
 
12                be payable to the estate of the insured.  Any
 
13                other accrued indemnities unpaid at the insured's
 
14                death may, at the option of the insurer, be paid
 
15                either to the designated beneficiary or to the
 
16                estate of the insured.  All other indemnities will
 
17                be payable to the insured."
 
18           (B)  The following provisions, or either of them, may
 
19                be included with the above provision at the option
 
20                of the insurer:
 
21                (i)  "If any indemnity of this policy shall be
 
22                     payable to the estate of the insured, or to
 
23                     an insured or beneficiary who is a minor or
 

 
a                                                     GOV-14(99)
Page 106                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1                     otherwise not competent to give a valid
 
 2                     release, the insurer may pay the indemnity,
 
 3                     up to an amount not exceeding $2,000 to any
 
 4                     relative by blood or connection by marriage
 
 5                     or through reciprocal beneficiary status of
 
 6                     the insured or beneficiary who is deemed by
 
 7                     the insurer to be equitably entitled thereto.
 
 8                     Any payment made by the insurer in good faith
 
 9                     pursuant to this provision shall fully
 
10                     discharge the insurer to the extent of the
 
11                     payment."
 
12               (ii)  "Subject to any written direction of the
 
13                     insured in the application or otherwise all
 
14                     or a portion of any indemnities provided by
 
15                     this policy on account of hospital, nursing,
 
16                     medical, or surgical services may, at the
 
17                     insurer's option and unless the insured
 
18                     requests otherwise in writing not later than
 
19                     the time of filing proofs of loss, be paid
 
20                     directly to the hospital or person rendering
 
21                     the services; but it is not required that the
 
22                     service be rendered by a particular hospital
 
23                     or person."
 

 
a                                                     GOV-14(99)
Page 107                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1     (10)  "Physical Examinations and Autopsy:  The insurer at its
 
 2           own expense shall have the right and opportunity to
 
 3           examine the person of the insured when and as often as
 
 4           it may reasonably require during the pendency of a
 
 5           claim hereunder and to make an autopsy in case of death
 
 6           where it is not forbidden by law."
 
 7     (11)  "Legal Actions:  No action at law or in equity shall be
 
 8           brought to recover on this policy prior to the
 
 9           expiration of sixty days after written proof of loss
 
10           has been furnished in accordance with the requirements
 
11           of this policy.  No action at law or in equity shall be
 
12           brought after the expiration of three years after the
 
13           time written proof of loss is required to be
 
14           furnished."
 
15     (12)  (A)  "Change of Beneficiary:  Unless the insured makes
 
16                an irrevocable designation of beneficiary, the
 
17                right to change of beneficiary is reserved to the
 
18                insured and the consent of the beneficiary or
 
19                beneficiaries shall not be requisite to surrender
 
20                or assignment of this policy or to any change of
 
21                beneficiary or beneficiaries, or to any other
 
22                changes in this policy."
 
23           (B)  The first clause of the above provision, relating
 

 
a                                                     GOV-14(99)
Page 108                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1                to the irrevocable designation of beneficiary, may
 
 2                be omitted at the insurer's option."
 
 3      SECTION 57.  Section 431:10A-202, Hawaii Revised Statutes,
 
 4 is amended to read as follows:
 
 5      "431:10A-202  Health care groups.  A policy of group
 
 6 disability insurance may be issued to a corporation, as
 
 7 policyholder, existing primarily for the purpose of assisting
 
 8 individuals who are its subscribers in securing medical,
 
 9 hospital, dental, and other health care services for themselves
 
10 and their dependents[,] including reciprocal beneficiaries,
 
11 covering all and not less than five hundred such subscribers and
 
12 dependents, with respect only to medical, hospital, dental, and
 
13 other health care services."
 
14      SECTION 58.  Section 431:10A-401, Hawaii Revised Statutes,
 
15 is amended to read as follows:
 
16      "431:10A-401  Purpose.  It is the purpose of this part to
 
17 provide a means of more adequately meeting the needs of persons
 
18 who are sixty-five years of age or older and their spouses or
 
19 reciprocal beneficiaries for insurance coverage against financial
 
20 loss from accident or disease through the combined resources and
 
21 experience of a number of insurers; to make possible the fullest
 
22 extension of such coverage by encouraging insurers to combine
 
23 their resources and experience and to exercise their collective
 

 
a                                                     GOV-14(99)
Page 109                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 efforts in the development and offering of policies of such
 
 2 insurance to all such applicants at costs lower than those
 
 3 generally available through individual insurers;  and to regulate
 
 4 the joint activities herein authorized in accordance with the
 
 5 intent of Congress as expressed in the Act of Congress of March
 
 6 9, 1945 (Public Law 15, 79th Congress), as amended."
 
 7      SECTION 59.  Section 431:10A-403, Hawaii Revised Statutes,
 
 8 is amended to read as follows:
 
 9      "431:10A-403  Association of insurers; policyholder;
 
10 policy.(a)  Any insurer may join with one or more other
 
11 insurers to plan, develop, underwrite, offer and provide to any
 
12 person who is sixty-five years of age or older and to the spouse
 
13 or reciprocal beneficiary of such person, extended health
 
14 insurance against financial loss from accident or disease, or
 
15 both.  The insurance may be offered, issued and administered
 
16 jointly by two or more insurers by a group policy issued to a
 
17 policyholder through an association formed for the purpose of
 
18 offering, selling, issuing and administering such insurance.
 
19      (b)  The policyholder may be an association, a trustee, or
 
20 any other person.  A master group policy issued to an association
 
21 or to a trustee or any person appointed by an association for the
 
22 purpose of providing the insurances described in this part shall
 
23 be another form of group disability insurance.
 

 
a                                                     GOV-14(99)
Page 110                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1      Any form of policy approved by the commissioner for an
 
 2 association shall be offered throughout the State to all persons
 
 3 sixty-five and older and their spouses[,] or reciprocal
 
 4 beneficiaries, and the coverage of any person insured under such
 
 5 a form of policy shall not be cancellable except for nonpayment
 
 6 of premiums unless the coverage of all persons insured under such
 
 7 form of policy is also cancelled.
 
 8      (c)  Any such policy may provide, among other things, that
 
 9 the benefits payable under the policy are subject to reduction if
 
10 the individual insured has any other coverage providing hospital,
 
11 surgical or medical benefits whether on an indemnity basis or a
 
12 provision of service basis resulting in such insured being
 
13 eligible for more than one hundred per cent of covered expenses
 
14 which the insured is required to pay.  Any insurer issuing
 
15 individual policies providing extended hospital, surgical or
 
16 medical benefits to persons sixty-five years of age and older and
 
17 their spouses or reciprocal beneficiaries may also use such a
 
18 policy provision."
 
19      SECTION 60.  Section 431:10A-601, Hawaii Revised Statutes,
 
20 is amended to read as follows:
 
21      "[[] 431:10A-601[]]  Reciprocal beneficiary [family]
 
22 coverage [defined; policyholder and employer responsibility for
 
23 costs; availability].(a)  Any other law to the contrary
 

 
a                                                     GOV-14(99)
Page 111                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 notwithstanding, reciprocal [beneficiary family coverage, as
 
 2 defined inn subsection (b), shall be made available to reciprocal
 
 3 beneficiaries, as defined in chapter 572C, but only to the extent
 
 4 that family coverage, as defined in section 431:10A-103, is
 
 5 currently available to individuals who are not reciprocal
 
 6 beneficiaries.
 
 7      (b)  As used in this section, reciprocal beneficiary family
 
 8 coverage means a policy that insures, originally or upon
 
 9 subsequent amendment, a reciprocal beneficiary who shall be
 
10 deemed the policyholder, the other party to the policyholder's
 
11 reciprocal beneficiary relationship registered pursuant to
 
12 chapter 572C, dependent children or any child of any other person
 
13 dependent upon either reciprocal beneficiary.
 
14      (c)  If a reciprocal beneficiary policyholder incurs
 
15 additional costs or premiums, if any, by electing reciprocal
 
16 beneficiary family coverage under this section, the employer may
 
17 pay additional costs or premiums.] beneficiaries shall be treated
 
18 the same as spouses for purposes of this article."
 
19      SECTION 61.  Section 431:10B-105, Hawaii Revised Statutes,
 
20 is amended by amending subsection (a) to read as follows:
 
21      "(a)  Credit life insurance.
 
22      (1)  The initial amount of credit life insurance shall not
 
23           exceed the total amount repayable under the contract of
 

 
a                                                     GOV-14(99)
Page 112                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1           indebtedness and, where an indebtedness is repayable in
 
 2           substantially equal installments, the amount of
 
 3           insurance shall at no time exceed the scheduled or
 
 4           actual amount of unpaid indebtedness, whichever is
 
 5           greater; except that if the sole purpose of the loan is
 
 6           to provide future advances to the debtor to meet
 
 7           education or education related expenses of the debtor,
 
 8           the debtor's spouse, reciprocal beneficiary, children,
 
 9           or other dependents, the amount of insurance may equal,
 
10           but may not exceed, the total amount of the described
 
11           expenses forecast at the time of entry into the loan
 
12           agreement with the creditor, less the amount of all
 
13           repayments by the debtor.  In the case of revolving
 
14           loan or revolving charge accounts, the insurance shall
 
15           at no time exceed the unpaid indebtedness.
 
16      (2)  Notwithstanding the provisions of subsection (a)(1),
 
17           insurance on agricultural credit transaction
 
18           commitments not exceeding one year in duration may be
 
19           written up to the amount of the loan commitment, on a
 
20           nondecreasing or level term plan."
 
21      SECTION 62.  Section 431:10C-111, Hawaii Revised Statutes,
 
22 is amended by amending subsection (c) to read as follows:
 
23      "(c)  No insurer shall refuse to continue a motor vehicle
 

 
a                                                     GOV-14(99)
Page 113                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 insurance policy based solely upon a person's race, creed, ethnic
 
 2 extraction, age, sex, length of driving experience, marital or
 
 3 reciprocal beneficiary status, residence, physical handicap, or
 
 4 because an insured has elected to obtain any required or optional
 
 5 coverage or deductible required by law.  If an insured alleges
 
 6 that the insurer's refusal to continue the motor vehicle
 
 7 insurance policy is based solely upon the insured's race, creed,
 
 8 ethnic extraction, age, sex, length of driving experience,
 
 9 marital or reciprocal beneficiary status, residence, physical
 
10 handicap, or because the insured has elected to obtain any
 
11 required or optional coverage or deductible provided by law, the
 
12 burden of proof shall rest with the insurer to prove that the
 
13 refusal to continue the policy was not based on noncompliance
 
14 with this subsection."
 
15      SECTION 63.  Section 431:10C-207, Hawaii Revised Statutes,
 
16 is amended to read as follows:
 
17      "431:10C-207  Discriminatory practices prohibited.  No
 
18 insurer shall base any standard or rating plan, in whole or in
 
19 part, directly or indirectly, upon a person's race, creed, ethnic
 
20 extraction, age, sex, length of driving experience, credit bureau
 
21 rating, marital or reciprocal beneficiary status, or physical
 
22 handicap."
 
23      SECTION 64.  Section 431:10C-302, Hawaii Revised Statutes,
 

 
a                                                     GOV-14(99)
Page 114                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 is amended to read as follows:
 
 2      "(a)  In addition to the motor vehicle insurance coverages
 
 3 described in section 431:10C-301, every insurer issuing a motor
 
 4 vehicle insurance policy shall make available to the insured the
 
 5 following optional insurance under the following conditions:
 
 6      (1)  At the option of the insured, provisions covering loss
 
 7           resulting from damage to the insured's motor vehicle
 
 8           with such deductibles, including but not limited to
 
 9           collision and comprehensive deductibles of $50, $100,
 
10           $250, $500, $1,000, $1,500, and $2,000, at
 
11           appropriately reduced premium rates, as the
 
12           commissioner, by regulation, shall provide;
 
13      (2)  At the option of the insured, compensation to the
 
14           insured, the insured's spouse, the insured's reciprocal
 
15           beneficiary, any dependents, or any occupants of the
 
16           insured's vehicle for damages not covered by personal
 
17           injury protection benefits;
 
18      (3)  Additional coverages and benefits with respect to any
 
19           injury or any other loss from motor vehicle accidents
 
20           or from operation of a motor vehicle for which the
 
21           insurer may provide for aggregate limits with respect
 
22           to such additional coverage so long as the basic
 
23           liability coverages provided are not less than those
 

 
a                                                     GOV-14(99)
Page 115                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1           required by section 431:10C-301(b)(1) and (b)(2);
 
 2      (4)  At the option of the insured, an option in writing for
 
 3           coverage for wage loss benefits for monthly earnings
 
 4           loss for injury arising out of a motor vehicle
 
 5           accident.  Any change in the wage loss benefits
 
 6           coverage selected by an insured shall apply only to
 
 7           benefits arising out of motor vehicle accidents
 
 8           occurring after the date the change becomes effective.
 
 9           Coverage shall be offered in the amounts of $1,000 a
 
10           month to $5,000 a month in increments of $500 a month;
 
11           however, nothing shall prevent an insurer from making
 
12           available higher limits of coverage.
 
13      Benefit payments under this paragraph shall be for no less
 
14 than two years following the date of the accidental harm and be
 
15 made for lost net income after taxes for as long as the treating
 
16 health care provider determines that the covered person's
 
17 injuries prevent the person from engaging in the employment in
 
18 which the person was engaged immediately prior to the accident.
 
19 Benefit payments after more than two years following the date of
 
20 the accident shall continue if the treating health care provider
 
21 determines the person is disabled from employment to which the
 
22 person is suited by education, training, and experience.  If,
 
23 pursuant to this requirement, the covered person engages in a
 

 
a                                                     GOV-14(99)
Page 116                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 form of employment other than that in which the person was
 
 2 engaged immediately prior to the accident, the person shall
 
 3 receive payment for the difference between the person's resulting
 
 4 net income after taxes and the person's net income after taxes
 
 5 immediately prior to the accident;
 
 6      (5)  An option in writing for minimum coverage for death
 
 7           benefits in an amount of $25,000, to be paid to named
 
 8           beneficiaries.  If there is no named beneficiary, the
 
 9           amount shall be paid to the estate.  Coverage shall
 
10           also be made available for increased death benefits in
 
11           increments of $25,000 up to $100,000; however, nothing
 
12           shall prevent an insurer from making available higher
 
13           limits of coverage.  At the option of the insured,
 
14           coverage for funeral expenses of $2,000 shall be made
 
15           available;
 
16      (6)  Terms, conditions, exclusions, and deductible clauses,
 
17           coverages, and benefits which:
 
18           (A)  Are consistent with the required provisions of
 
19                such policy,
 
20           (B)  Limit the variety of coverage available so as to
 
21                give buyers of insurance reasonable opportunity to
 
22                compare the cost of insuring with various
 
23                insurers, and
 

 
a                                                     GOV-14(99)
Page 117                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1           (C)  Are approved by the commissioner as fair and
 
 2                equitable;
 
 3      (7)  At appropriately reduced premium rates, deductibles
 
 4           applicable only to claims of an insured in the amounts
 
 5           of $100, $300, $500, and $1,000 from all personal
 
 6           injury protection benefits otherwise payable; provided
 
 7           that if two or more insureds to whom the deductible is
 
 8           applicable under the contract of insurance are injured
 
 9           in the same accident, the aggregate amount of the
 
10           deductible applicable to all of them shall not exceed
 
11           the specified deductible, which amount where necessary
 
12           shall be allocated equally among them;
 
13      (8)  Every insurer shall fully disclose the availability of
 
14           all required and optional coverages and deductibles,
 
15           including the nature and amounts, at the issuance or
 
16           delivery of the policy; or, for a policy already issued
 
17           at the time of the effective date of this Act,
 
18           disclosure shall be made at the first renewal after the
 
19           effective date of this Act.  The insurer shall also
 
20           disclose at issuance or renewal, as applicable, the
 
21           effect on premium rates and savings of each option and
 
22           deductible.  Further offers or disclosures thereafter
 
23           shall be required to be included with every other
 

 
a                                                     GOV-14(99)
Page 118                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1           renewal or replacement policy.  All elections of
 
 2           coverages, options, and deductibles by a named insured
 
 3           shall be binding upon additional insureds covered under
 
 4           the named insured's policy.  The purpose of this
 
 5           paragraph is to inform insureds or prospective insureds
 
 6           of the coverages under this article;
 
 7      (9)  (A)  An insurer may make available, and provide at the
 
 8                option of the named insured, the benefits
 
 9                described in section 431:10C-A(a) through managed
 
10                care providers such as a health maintenance
 
11                organization or a preferred provider organization.
 
12                The option may include conditions and limitations
 
13                to coverage, including deductibles and coinsurance
 
14                requirements, as approved by the commissioner.
 
15                The commissioner shall approve those conditions
 
16                and limitations which are substantially comparable
 
17                to or exceed the coverage provided under section
 
18                431:10C-B;
 
19           (B)  An insurer may make available, and provide at the
 
20                option of the named insured, deductible and
 
21                coinsurance arrangements whereby the recipient of
 
22                care, treatment, services, products, expenses, or
 
23                accommodations shares in the payment obligation;
 

 
a                                                     GOV-14(99)
Page 119                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1           (C)  No deductible or coinsurance under a policy
 
 2                covered under section 431:10C-302(a)(9)(A) or (B)
 
 3                shall be applied with respect to care, treatment,
 
 4                services, products, or accommodation provided or
 
 5                expenses incurred by an insured during the first
 
 6                twenty-four hours in which emergency treatment has
 
 7                been provided or until the insured patient's
 
 8                emergency medical condition is stabilized,
 
 9                whichever is longer;
 
10           (D)  (i)  The optional coverage prescribed in section
 
11                     431:10C-302(a)(9)(A) and (B) shall apply only
 
12                     to the named insured, resident spouse,
 
13                     resident reciprocal beneficiary, or resident
 
14                     relative; and
 
15                (ii) "Resident relative" means a person who, at
 
16                     the time of the accident, is related by
 
17                     blood, marriage, or adoption to the named
 
18                     insured or resident spouse and who resides in
 
19                     the named insured's household, even if
 
20                     temporarily living elsewhere, and any ward or
 
21                     foster child who usually resides with the
 
22                     named insured, even if living elsewhere;
 
23           (E)  An agreement made under section 431:10C-302(a)(9)
 

 
a                                                     GOV-14(99)
Page 120                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1                must be a voluntary agreement between the insured
 
 2                and the insurer, and no insurer shall require an
 
 3                insured to agree to those policy provisions as a
 
 4                condition of providing insurance coverage.
 
 5                Requiring an agreement as a precondition to the
 
 6                provision of insurance shall constitute an unfair
 
 7                insurance practice and shall be subject to the
 
 8                provisions, remedies, and penalties provided in
 
 9                article 13; and
 
10           (F)  An insurer providing the coverages authorized in
 
11                section 431:10C-302(a)(9)(A) and (B) shall
 
12                demonstrate in rate filings submitted to the
 
13                commissioner the savings to the insured to be
 
14                realized under the plan;
 
15      and
 
16      (10) An insurer shall make available optional coverage for
 
17           naturopathic, acupuncture, and nonremedial care and
 
18           treatment rendered in accordance with the teachings,
 
19           faith, or belief of any group which relies upon
 
20           spiritual means through prayer for healing.
 
21      The commissioner shall adopt rules, including policy limits,
 
22 terms, and conditions as necessary to implement the requirements
 
23 of this section."
 

 
a                                                     GOV-14(99)
Page 121                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1      SECTION 65.  Section 431:10C-305, Hawaii Revised Statutes,
 
 2 is amended by amending subsection (b) to read as follows:
 
 3      "(b)(1)  Except as provided in paragraph (2), personal
 
 4 injury protection benefits shall be paid primarily from the
 
 5 following sources in the following conditions:
 
 6      (A)  The insurance on the vehicle occupied by the injured
 
 7           person at the time of the accident; or
 
 8      (B)  The insurance on the vehicle which caused accidental
 
 9           harm if the injured person is a pedestrian (including a
 
10           bicyclist).
 
11 If there is no insurance on the vehicle, any other motor vehicle
 
12 insurance applicable to the injured person shall apply. No person
 
13 shall recover personal injury protection benefits from more than
 
14 one insurer for accidental harm as a result of the same accident;
 
15      (2)  All personal injury protection benefits shall be paid
 
16           secondarily and net of any benefits a person is
 
17           entitled to receive because of the accidental harm from
 
18           workers' compensation laws; provided that:
 
19           (A)  The total amount a person is entitled to receive
 
20                for monthly earnings loss under this article shall
 
21                be limited to the amount of any applicable
 
22                coverage under section 431:10C-302, without any
 
23                deduction of any amount received as compensation
 

 
a                                                     GOV-14(99)
Page 122                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1                for lost earnings under any workers' compensation
 
 2                law;
 
 3           (B)  The aggregate of the payments from both sources
 
 4                shall not exceed eighty per cent of the person's
 
 5                monthly earnings as provided in section
 
 6                431:10C-302(a)(4).  However, if the person's
 
 7                employer provides both workers' compensation and
 
 8                personal injury protection payments, the aggregate
 
 9                shall not exceed the person's net monthly earnings
 
10                (computed by subtracting the total of federal and
 
11                state income taxes and employee social security
 
12                contributions from the gross monthly earnings),
 
13                provided that the workers' compensation payments
 
14                shall not be less than required by chapter 386;
 
15                and
 
16           (C)  This section shall not apply to benefits payable
 
17                to a surviving spouse or reciprocal beneficiary
 
18                and any surviving dependent as provided under
 
19                section 431:10C-304.
 
20 If the person does not collect such benefits under the workers'
 
21 compensation laws by reason of the contest of this right to so
 
22 collect by the person or organization responsible for payment
 
23 thereof, the injured person, if otherwise eligible, shall,
 

 
a                                                     GOV-14(99)
Page 123                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 nevertheless, be entitled to receive personal injury protection
 
 2 benefits and, upon payment thereof, the personal injury
 
 3 protection insurer shall be subrogated to the injured person's
 
 4 rights to collect such benefits."
 
 5      SECTION 66.  Section 431:10C-409, Hawaii Revised Statutes,
 
 6 is amended to read as follows:
 
 7      "431:10C-409  Establishment and criteria.  The commissioner
 
 8 shall, after consultation with the board, establish and
 
 9 promulgate the rating rules, classification standards and rules,
 
10 rates, rating plans, territories, and policy forms for use in the
 
11 provision of all motor vehicle insurance issued under the joint
 
12 underwriting plan, in accordance with the following provisions:
 
13      (1)  Rates shall not be excessive, inadequate or unfairly
 
14           discriminatory.
 
15      (2)  Consideration shall be given to the following:
 
16           (A)  The plan's past and prospective loss experience
 
17                within the State;
 
18           (B)  Contingencies in the administration of motor
 
19                vehicle insurance sold;
 
20           (C)  Past and prospective expenses in the sale and
 
21                administration of motor vehicle insurance;
 
22           (D)  Income from investments of premiums and other
 
23                proceeds received on account of joint underwriting
 

 
a                                                     GOV-14(99)
Page 124                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1                plan motor vehicle insurance sold; and
 
 2           (E)  All other factors demonstrated to be relevant by a
 
 3                current actuarially sound study of the definable
 
 4                risks involved.
 
 5      (3)  The commissioner may:
 
 6           (A)  Establish rating territories and group risks by
 
 7                classifications for the establishing of rates and
 
 8                minimum premiums;
 
 9           (B)  Provide for, by regulation, a uniform
 
10                classification of risks and rating territories for
 
11                the various coverages;
 
12           (C)  Modify classification rates to produce rates in
 
13                accordance with rating plans which establish
 
14                standards for measuring variations in hazards or
 
15                expense provisions, or both.  Such standards may
 
16                measure any differences among risks including
 
17                vehicles, occupations, past traffic convictions,
 
18                and involvement in past accidents, provided they
 
19                are established to have a demonstrable effect upon
 
20                losses or expense; and
 
21           (D)  Ensure that no standard or rating plan shall be
 
22                based, in whole or in part, directly or
 
23                indirectly, upon a person's race, creed, ethnic
 

 
a                                                     GOV-14(99)
Page 125                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1                extraction, age, sex, length of driving
 
 2                experience, credit bureau rating, marital or
 
 3                reciprocal beneficiary status, or physical
 
 4                handicap."
 
 5      SECTION 67.  Section 431:10D-104, Hawaii Revised Statutes,
 
 6 is amended by amending subsection (c) to read as follows:
 
 7      "(c)  Cash surrender value - life:
 
 8      (1)  Any cash surrender value available under the policy in
 
 9           the event of default in a premium payment due on any
 
10           policy anniversary, whether or not required by
 
11           subsection (b), shall be an amount not less than the
 
12           excess, if any, of the present value, on the
 
13           anniversary, of the future guaranteed benefits which
 
14           would have been provided for by the policy including
 
15           any existing  paid-up additions, if there had been no
 
16           default, over the sum of:
 
17           (A)  The then present value of the adjusted premiums as
 
18                defined in subsection (e) corresponding to
 
19                premiums which would have fallen due on and after
 
20                the anniversary, and
 
21           (B)  The amount of any indebtedness to the insurer on
 
22                account of or secured by the policy.  Provided
 
23                that for any policy issued on or after the
 

 
a                                                     GOV-14(99)
Page 126                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1                operative date of subsection (e)(8) as defined
 
 2                therein, which provides supplemental life
 
 3                insurance or annuity benefits at the option of the
 
 4                insured and for an identifiable additional premium
 
 5                by rider or supplemental policy provision, the
 
 6                cash surrender value referred to in item (1) shall
 
 7                be an amount not less than the sum of the cash
 
 8                surrender value as defined in such paragraph for
 
 9                an otherwise similar policy issued at the same age
 
10                without such rider or supplemental policy
 
11                provision and the cash surrender value as defined
 
12                in such paragraph for a policy which provides only
 
13                the benefits otherwise provided by such rider or
 
14                supplemental policy provision.
 
15                     Provided further that for any family policy
 
16                issued on or after the operative date of
 
17                subsection (e)(8) as defined therein, which
 
18                defines a primary insured and provides term
 
19                insurance on the life of the spouse or reciprocal
 
20                beneficiary of the primary insured expiring before
 
21                the spouse's or reciprocal beneficiary's age
 
22                seventy-one, the cash surrender value referred to
 
23                in item (1) shall be an amount not less than the
 

 
a                                                     GOV-14(99)
Page 127                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1                sum of the cash surrender value as defined in such
 
 2                paragraph for an otherwise similar policy issued
 
 3                at the same age without such term insurance on the
 
 4                life of the spouse or reciprocal beneficiary and
 
 5                the cash surrender value as defined in such
 
 6                paragraph for an otherwise similar policy issued
 
 7                at the same age without such rider or supplemental
 
 8                policy provision and the cash surrender value as
 
 9                defined in such paragraph [for] a policy which
 
10                provides only the benefits otherwise provided by
 
11                such term insurance on the life of the spouse[.]
 
12                or reciprocal beneficiary.
 
13      (2)  Any cash surrender value available within thirty days
 
14           after any policy anniversary, of the future guaranteed
 
15           benefits provided for by the policy including any
 
16           existing paid-up additions, decreased by any
 
17           indebtedness to the insurer on account of or secured by
 
18           the policy."
 
19      SECTION 68.  Section 431:10D-114, Hawaii Revised Statutes,
 
20 is amended to read as follows:
 
21      "431:10D-114  Miscellaneous proceeds.  Upon the death of
 
22 the insured and except as is otherwise expressly provided by the
 
23 policy or premium deposit agreement, a life insurer may pay to
 

 
a                                                     GOV-14(99)
Page 128                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 the surviving spouse[,] or reciprocal beneficiary, children,
 
 2 beneficiary, or person other than the insured's estate, appearing
 
 3 to the insurer to be equitably entitled to such payment, sums
 
 4 then held by it and comprising:
 
 5      (1)  Premiums paid in advance, if such premiums did not fall
 
 6           due prior to the death, or funds held on deposit for
 
 7           the payment of future premiums.
 
 8      (2)  Dividends theretofore declared on the policy and held
 
 9           by the insurer under the insured's option.
 
10      (3)  Dividends becoming payable on or after the death of the
 
11           insured."
 
12      SECTION 69.  Section 431:10D-201, Hawaii Revised Statutes,
 
13 is amended by amending subsection (b) to read as follows:
 
14      "(b)  Subsection (a) shall not apply to contracts of life
 
15 insurance insuring only individuals:
 
16      (1)  Related by marriage, by a reciprocal beneficiary
 
17           relationship, by blood, or by legal adoption;  or
 
18      (2)  Having a common interest through ownership of a
 
19           business enterprise, or of a substantial legal interest
 
20           or equity in the business enterprise, and who are
 
21           actively engaged in its management; or
 
22      (3)  Otherwise having an insurable interest in each other's
 
23           lives."
 

 
a                                                     GOV-14(99)
Page 129                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1      SECTION 70.  Section 431:10D-203, Hawaii Revised Statutes,
 
 2 is amended to read as follows:
 
 3      "431:10D-203  Debtor groups.  The lives of a group of
 
 4 individuals may be insured under a policy issued to a creditor or
 
 5 its parent holding company or to a trustee or trustees or agent
 
 6 designated by two or more creditors, which creditor, holding
 
 7 company, affiliate, trustee, trustees or agent shall be deemed
 
 8 the policyholder, to insure debtors of the creditor or creditors,
 
 9 subject to the following requirements:
 
10      (1)  The debtors eligible for insurance under the policy
 
11           shall be all of the debtors of the creditor or
 
12           creditors or all of any class or classes thereof.  The
 
13           policy may provide that the term debtors shall include:
 
14           (A)  Borrowers of money or purchasers or lessees of
 
15                goods, services, or property for which payment is
 
16                arranged through a credit transaction;
 
17           (B)  The debtors of one or more subsidiary
 
18                corporations; and
 
19           (C)  The debtors of one or more affiliated
 
20                corporations, proprietorships, or partnerships, if
 
21                the business of the policyholder and the affiliate
 
22                is under common control.
 
23      (2)  The premiums for the policy shall be paid either from
 

 
a                                                     GOV-14(99)
Page 130                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1           the creditor's funds, or from charges collected from
 
 2           the insured debtors, or from both.  A policy on which
 
 3           part or all of the premiums is to be derived from the
 
 4           collection from the insured debtors of identifiable
 
 5           charges not required of uninsured debtors shall not
 
 6           include, in the class or classes of debtors eligible
 
 7           from insurance, debtors under obligations outstanding
 
 8           at its date of issue without evidence of individual
 
 9           insurability unless at least seventy-five per cent of
 
10           the then eligible debtors elect to pay the required
 
11           charges.  Except as provided in item (3), a policy on
 
12           which no part of the premium is to be derived from the
 
13           collection of such identifiable charges must insure all
 
14           eligible debtors.
 
15      (3)  An insurer may exclude any debtors as to whom evidence
 
16           of individual insurability is not satisfactory to the
 
17           insurer.
 
18      (4)  The policy may be issued only if the group of eligible
 
19           debtors is then receiving new entrants at the rate of
 
20           at least one hundred persons yearly, or may reasonably
 
21           be expected to receive at least one hundred new
 
22           entrants during the first policy year, and only if the
 
23           policy reserves to the insurer the right to require
 

 
a                                                     GOV-14(99)
Page 131                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1           evidence of individual insurability if less than
 
 2           seventy-five per cent of the new entrants become
 
 3           insured.
 
 4      (5)  The amount of the insurance on the life of any debtor
 
 5           shall at no time exceed the greater of the scheduled or
 
 6           actual amount of unpaid indebtedness to the creditor,
 
 7           except that if the sole purpose of the loan is to
 
 8           provide future advances to the debtor to meet education
 
 9           or education-related expenses of the debtor, the
 
10           debtor's spouse, reciprocal beneficiary, children, or
 
11           other dependents, the amount of insurance may equal,
 
12           but may not exceed, the total amount of the described
 
13           expenses forecast at the time of entry into the loan
 
14           agreement with the creditor, less the amount of all
 
15           repayments by the debtor.  In the case of revolving
 
16           loan or revolving charge accounts, the insurance shall
 
17           at no time exceed the unpaid indebtedness.
 
18      (6)  The insurance shall be payable to the creditor or any
 
19           successor to the right, title and interest of the
 
20           creditor.  The payment shall reduce or extinguish the
 
21           unpaid indebtedness of the debtor to the extent of the
 
22           payment and, whenever the amount of insurance exceeds
 
23           the unpaid indebtedness, any such excess shall be
 

 
a                                                     GOV-14(99)
Page 132                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1           payable to a beneficiary, other than the creditor,
 
 2           named by the debtor or to the debtor's estate.
 
 3      (7)  Payment by the debtor insured under any such group life
 
 4           insurance contract of an amount not in excess of the
 
 5           premium charged the creditor by the insurer for such
 
 6           insurance pertaining to the debtor, shall not be deemed
 
 7           to constitute a charge upon a loan in violation of any
 
 8           banking or usury law or any law regulating installment
 
 9           sales."
 
10      SECTION 71.  Section 431:10D-212, Hawaii Revised Statutes,
 
11 is amended to read as follows:
 
12      "431:10D-212  Spouses, reciprocal beneficiaries, and
 
13 dependents of insured individuals.  Except for a policy issued
 
14 under section 431:10D-203 and section 431:10D-211, insurance
 
15 under any group life insurance policy issued pursuant to this
 
16 article may be extended to insure the employees or members of
 
17 such groups against loss due to the death of their spouses,
 
18 reciprocal beneficiaries, and dependent children subject to the
 
19 following:
 
20      (1)  The spouse, reciprocal beneficiary, and dependent of
 
21           the individual insured may be covered in amounts of
 
22           insurance equivalent to the amount of coverage of the
 
23           insured individual, provided that in the case of a
 

 
a                                                     GOV-14(99)
Page 133                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1           dependent other than a spouse or reciprocal beneficiary
 
 2           of the insured individual the amount of insurance for
 
 3           the dependent shall not be in excess of fifty per cent
 
 4           of the coverage of the insured individual or $5,000
 
 5           whichever is less, and provided further that in the
 
 6           case of a dependent whose age at death is under six
 
 7           months, the amount shall not be in excess of $2,000.
 
 8      (2)  The premiums for the insurance of the spouse,
 
 9           reciprocal beneficiary, or dependent shall be paid
 
10           either from funds contributed by the employer, union,
 
11           association or other person to whom the policy has been
 
12           issued, or from funds contributed by the individual
 
13           insured, or from both.
 
14      (3)  An insurer may exclude or limit the coverage on any
 
15           spouse, reciprocal beneficiary, or dependent child as
 
16           to whom evidence of individual insurability is not
 
17           satisfactory to the insurer.
 
18      (4)  For purposes of this section:
 
19           (A)  A dependent shall be a child of the insured
 
20                individual:
 
21                (i)  Under eighteen years of age; or
 
22                (ii) Under twenty-three years of age who is
 
23                     attending an educational institution and
 
24                     relying upon the insured individual for
 

 
a                                                     GOV-14(99)
Page 134                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1                     financial support; or
 
 2               (iii) Regardless of age who is incapable of self-
 
 3                     sustaining employment by reason of mental
 
 4                     retardation or physical handicap and is
 
 5                     chiefly dependent upon the insured individual
 
 6                     for support and maintenance.
 
 7           (B)  The term individual shall be deemed to include a
 
 8                person or a member of any group provided in
 
 9                section 431:10D-202 and section 431:10D-204
 
10                through section 431:10D-210."
 
11      SECTION 72.  Section 431:10D-308, Hawaii Revised Statutes,
 
12 is amended to read as follows:
 
13      "431:10D-308  Facility of payment.  Such a policy may also
 
14 provide that if the beneficiary designated in the policy does not
 
15 surrender the policy with due proof of death within the period
 
16 stated in the policy, which shall not be less than thirty days
 
17 after the death of the insured, or if the beneficiary is the
 
18 estate of the insured or is a minor, or dies before the insured
 
19 or is not legally competent to give a valid release, then the
 
20 insurer may make payment under the policy to the personal
 
21 representative of the insured, or to any of the insured's
 
22 relatives by blood, legal adoption or connection by marriage[,]
 
23 or by reciprocal beneficiary relationship, or to any person
 

 
a                                                     GOV-14(99)
Page 135                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 appearing to the insurer to be equitably entitled to such payment
 
 2 by reason of having been named beneficiary, or by reason of
 
 3 having incurred expense for the maintenance, medical attention,
 
 4 or burial of the insured.  The policy may also include a similar
 
 5 provision applicable to any other payment due under the policy."
 
 6      SECTION 73.  Chapter 432, Hawaii Revised Statutes, is
 
 7 amended by adding to part VI of article I a new section to be
 
 8 appropriately designated and to read as follows:
 
 9      "432:1-    Reciprocal beneficiary coverage.  Any other law
 
10 to the contrary notwithstanding, all individual and group
 
11 hospital or medical service plan contracts which provide coverage
 
12 for a subscriber's or member's spouse shall prvoide the same
 
13 coverage for a subscriber's or member's reciprocal beneficiary."
 
14      SECTION 74.  Section 432D-23, Hawaii Revised Statutes, is
 
15 amended to read as follows:
 
16      "[[]432D-23[]]  Required provisions and benefits.  (a)
 
17 Notwithstanding any provision of law to the contrary, each
 
18 policy, contract, plan, or agreement issued in the State after
 
19 January 1, 1995, by health maintenance organizations pursuant to
 
20 this chapter, shall include benefits provided in sections 431:10-
 
21 212, 431:10A-115, 431:10A-115.5, 431:10A-116, 431:10A-116.5, and
 
22 431:10A-116.6 and chapter 431M.
 
23      (b)  Notwithstanding any provision of law to the contrary,
 

 
a                                                     GOV-14(99)
Page 136                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 each policy, contract, plan, or agreement issued in the State
 
 2 after July 1, 19999, by health maintenance organizations pursuant
 
 3 to this chapter, shall provide the same coverage to reciprocal
 
 4 beneficiaries as is provided to spouses."
 
 5      SECTION 75.  Section 447E-3, Hawaii Revised Statutes, is
 
 6 amended to read as follows:
 
 7      "[[]477E-3[]]  Prohibited credit discrimination.(a)  It
 
 8 shall be unlawful for any creditor to discriminate against any
 
 9 applicant on the basis of marital or reciprocal beneficiary
 
10 status with respect to any aspect of a credit transaction.
 
11      (b)  An inquiry of marital or reciprocal beneficiary status
 
12 shall not constitute discrimination for the purposes of this
 
13 chapter if such inquiry is for the purpose of ascertaining the
 
14 creditor's rights and remedies applicable to the particular
 
15 extension of credit, and not to discriminate in a determination
 
16 of credit worthiness.
 
17      (c)  A request for the signature of both parties to a
 
18 marriage or a reciprocal beneficiary relationship for the purpose
 
19 of creating a valid lien, passing clear title, waiving inchoate
 
20 rights to, or assigning the earnings and profits, in any
 
21 transaction involving real property shall not be construed to be
 
22 discrimination under this part; provided that this provision
 
23 shall not be construed to permit a creditor to take marital or
 

 
a                                                     GOV-14(99)
Page 137                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 reciprocal beneficiary status into account in connection with the
 
 2 evaluation of credit worthiness of any applicant.
 
 3      (d)  Consideration or application of the real property laws
 
 4 directly or indirectly affecting credit worthiness shall not
 
 5 constitute discrimination for any purpose of this chapter.
 
 6      (e)  Whenever either party to a marriage or either
 
 7 reciprocal beneficiary contracts separately for credit or a loan,
 
 8 the contracting party shall be solely responsible for the debt so
 
 9 contracted.
 
10      (f)  Whenever each party to a marriage or each reciprocal
 
11 beneficiary separately and voluntarily applies for, and obtains,
 
12 separate credit accounts or loans with the same creditor, those
 
13 accounts or loans shall not be aggregated, or otherwise combined,
 
14 for purposes of determining permissible finance charges, or
 
15 permissible loan ceilings."
 
16      SECTION 76.  Section 515-3, Hawaii Revised Statutes, is
 
17 amended to read as follows:
 
18      "515-3  Discriminatory practices.  It is a discriminatory
 
19 practice for an owner or any other person engaging in a real
 
20 estate transaction, or for a real estate broker or salesperson,
 
21 because of race, sex, color, religion, marital or reciprocal
 
22 beneficiary status, familial status, ancestry, disability, age,
 
23 or HIV (human immunodeficiency virus) infection:
 

 
a                                                     GOV-14(99)
Page 138                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1      (1)  To refuse to engage in a real estate transaction with a
 
 2           person;
 
 3      (2)  To discriminate against a person in the terms,
 
 4           conditions, or privileges of a real estate transaction
 
 5           or in the furnishing of facilities or services in
 
 6           connection therewith;
 
 7      (3)  To refuse to receive or to fail to transmit a bona fide
 
 8           offer to engage in a real estate transaction from a
 
 9           person;
 
10      (4)  To refuse to negotiate for a real estate transaction
 
11           with a person;
 
12      (5)  To represent to a person that real property is not
 
13           available for inspection, sale, rental, or lease when
 
14           in fact it is so available, or to fail to bring a
 
15           property listing to the person's attention, or to
 
16           refuse to permit the person to inspect real property,
 
17           or to steer a person seeking to engage in a real estate
 
18           transaction;
 
19      (6)  To print, circulate, post, or mail, or cause to be so
 
20           published a statement, advertisement, or sign, or to
 
21           use a form of application for a real estate
 
22           transaction, or to make a record or inquiry in
 
23           connection with a prospective real estate transaction,
 

 
a                                                     GOV-14(99)
Page 139                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1           which indicates, directly or indirectly, an intent to
 
 2           make a limitation, specification, or discrimination
 
 3           with respect thereto;
 
 4      (7)  To offer, solicit, accept, use, or retain a listing of
 
 5           real property with the understanding that a person may
 
 6           be discriminated against in a real estate transaction
 
 7           or in the furnishing of facilities or services in
 
 8           connection therewith;
 
 9      (8)  To refuse to engage in a real estate transaction with a
 
10           person or to deny equal opportunity to use and enjoy a
 
11           housing accommodation due to a disability because the
 
12           person uses the services of a guide dog, signal dog, or
 
13           service animal; provided that reasonable restrictions
 
14           or prohibitions may be imposed regarding excessive
 
15           noise or other problems caused by those animals.  For
 
16           the purposes of this paragraph:
 
17      "Blind" shall be as defined in section 235-1;
 
18      "Deaf" shall be as defined in section 235-1;
 
19      "Guide dog" means any dog individually trained by a licensed
 
20 guide dog trainer for guiding a blind person by means of a
 
21 harness attached to the dog and a rigid handle grasped by the
 
22 person;
 
23      "Reasonable restriction" shall not include any restriction
 

 
a                                                     GOV-14(99)
Page 140                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 that allows any owner or person to refuse to negotiate or refuse
 
 2 to engage in a real estate transaction; provided that as used in
 
 3 this paragraph, the "reasonableness" of a restriction shall be
 
 4 examined by giving due consideration to the needs of a reasonable
 
 5 prudent person in the same or similar circumstances.  Depending
 
 6 on the circumstances, a "reasonable restriction" may require the
 
 7 owner of the service animal, guide dog, or signal dog to comply
 
 8 with one or more of the following:
 
 9      (A)  Observe applicable laws including leash laws and pick-
 
10           up laws;
 
11      (B)  Assume responsibility for damage caused by the dog;  or
 
12      (C)  Have the housing unit cleaned upon vacating by
 
13           fumigation, deodorizing, professional carpet cleaning,
 
14           or other method appropriate under the circumstances.
 
15 The foregoing list is illustrative only, and neither exhaustive
 
16 nor mandatory;
 
17      "Service animal" means any animal that is trained to provide
 
18 those life activities limited by the disability of the person;
 
19      "Signal dog" means any dog that is trained to alert a deaf
 
20 person to intruders or sounds;
 
21      (9)  To solicit or require as a condition of engaging in a
 
22           real estate transaction that the buyer, renter, or
 
23           lessee be tested for human immunodeficiency virus
 

 
a                                                     GOV-14(99)
Page 141                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1           infection (HIV), the causative agent of acquired
 
 2           immunodeficiency syndrome (AIDS);
 
 3      (10) To refuse to permit, at the expense of a person with a
 
 4           disability, reasonable modifications to existing
 
 5           premises occupied or to be occupied by the person if
 
 6           modifications may be necessary to afford the person
 
 7           full enjoyment of the premises.  A real estate broker
 
 8           or salesperson, where it is reasonable to do so, may
 
 9           condition permission for a modification on the person
 
10           agreeing to restore the interior of the premises to the
 
11           condition that existed before the modification,
 
12           reasonable wear and tear excepted;
 
13      (11) To refuse to make reasonable accommodations in rules,
 
14           policies, practices, or services, when the
 
15           accommodations may be necessary to afford a person with
 
16           a disability equal opportunity to use and enjoy a
 
17           housing accommodation;
 
18      (12) In connection with the design and construction of
 
19           covered multifamily housing accommodations for first
 
20           occupancy after March 13, 1991, to fail to design and
 
21           construct housing accommodations in such a manner that:
 
22           (A)  The housing accommodations have at least one
 
23                accessible entrance, unless it is impractical to
 

 
a                                                     GOV-14(99)
Page 142                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1                do so because of the terrain or unusual
 
 2                characteristics of the site; and
 
 3           (B)  With respect to housing accommodations with an
 
 4                accessible building entrance:
 
 5                (i)  The public use and common use portions of the
 
 6                     housing accommodations are accessible to and
 
 7                     usable by disabled persons;
 
 8               (ii)  Doors allow passage by persons in
 
 9                     wheelchairs; and
 
10              (iii)  All premises within covered multifamily
 
11                     housing accommodations contain an accessible
 
12                     route into and through the housing
 
13                     accommodations; light switches, electrical
 
14                     outlets, thermostats, and other environmental
 
15                     controls are in accessible locations;
 
16                     reinforcements in the bathroom walls allow
 
17                     installation of grab bars; and kitchens and
 
18                     bathrooms are accessible by wheelchair; or
 
19      (13) To discriminate against or deny a person access to, or
 
20           membership or participation in any multiple listing
 
21           service, real estate broker's organization, or other
 
22           service, organization, or facility involved either
 
23           directly or indirectly in real estate transactions, or
 
24           to discriminate against any person in the terms or
 

 
a                                                     GOV-14(99)
Page 143                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1           conditions of such access, membership, or
 
 2           participation."
 
 3      SECTION 77.  Section 515-5, Hawaii Revised Statutes, is
 
 4 amended to read as follows:
 
 5      "515-5  Discriminatory financial practices.  It is a
 
 6 discriminatory practice for a person, a representative of such
 
 7 person, or a real estate broker or salesperson, to whom an
 
 8 inquiry or application is made for financial assistance in
 
 9 connection with a real estate transaction or for the
 
10 construction, rehabilitation, repair, maintenance, or improvement
 
11 of real property, because of race, sex, color, religion, marital
 
12 or reciprocal beneficiary status, familial status, ancestry,
 
13 disability, age, or HIV (human immunodeficiency virus) infection:
 
14      (1)  To discriminate against the applicant;
 
15      (2)  To use a form of application for financial assistance
 
16           or to make or keep a record or inquiry in connection
 
17           with applications for financial assistance which
 
18           indicates, directly or indirectly, an intent to make a
 
19           limitation, specification, or discrimination unless
 
20           such records are required by federal law;
 
21      (3)  To discriminate in the making or purchasing of loans or
 
22           the provision of other financial assistance for
 
23           purchasing, constructing, improving, repairing, or
 

 
a                                                     GOV-14(99)
Page 144                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1           maintaining a dwelling, or the making or purchasing of
 
 2           loans or the provision of other financial assistance
 
 3           secured by residential real estate; or
 
 4      (4)  To discriminate in the selling, brokering, or
 
 5           appraising of residential real property."
 
 6      SECTION 78.  Section 515-6, Hawaii Revised Statutes, is
 
 7 amended by amending subsections (a) and (b) to read as follows:
 
 8      "515-6  Restrictive covenants and conditions.(a)  Every
 
 9 provision in an oral agreement or a written instrument relating
 
10 to real property which purports to forbid or restrict the
 
11 conveyance, encumbrance, occupancy, or lease thereof to
 
12 individuals because of race, sex, color, religion, marital or
 
13 reciprocal beneficiary status, familial status, ancestry,
 
14 disability, age, or HIV (human immunodeficiency virus) infection,
 
15 is void.
 
16      (b)  Every condition, restriction, or prohibition, including
 
17 a right of entry or possibility of reverter, which directly or
 
18 indirectly limits the use or occupancy of real property on the
 
19 basis of race, sex, color, religion, marital or reciprocal
 
20 beneficiary status, familial status, ancestry, disability, age,
 
21 or HIV infection is void, except a limitation, on the basis of
 
22 religion, on the use of real property held by a religious
 
23 institution or organization or by a religious or charitable
 

 
a                                                     GOV-14(99)
Page 145                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 organization operated, supervised, or controlled by a religious
 
 2 institution or organization, and used for religious or charitable
 
 3 purposes."
 
 4      SECTION 79.  Section 515-7, Hawaii Revised Statutes, is
 
 5 amended to read as follows:
 
 6      "515-7  Blockbusting.  It is a discriminatory practice for
 
 7 a person, representative of a person, real estate broker or
 
 8 salesperson, for the purpose of inducing a real estate
 
 9 transaction from which the person, representative, broker or
 
10 salesperson may benefit financially, because of race, sex, color,
 
11 religion, marital or reciprocal beneficiary status, ancestry,
 
12 disability, age, or HIV infection:
 
13      (1)  To represent that a change has occurred or will or may
 
14           occur in the composition of the owners or occupants in
 
15           the block, neighborhood, or area in which the real
 
16           property is located, or
 
17      (2)  To represent that this change will or may result in the
 
18           lowering of property values, an increase in criminal or
 
19           antisocial behavior, or a decline in the quality of
 
20           schools in the block, neighborhood, or area in which
 
21           the real property is located."
 
22      SECTION 80.  Section 515-16, Hawaii Revised Statutes, is
 
23 amended to read as follows:
 

 
a                                                     GOV-14(99)
Page 146                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1      "515-16  Other discriminatory practices.  It is a
 
 2 discriminatory practice for a person, or for two or more persons
 
 3 to conspire:
 
 4      (1)  To retaliate, threaten, or discriminate against a
 
 5           person because of the exercise or enjoyment of any
 
 6           right granted or protected by this chapter, or because
 
 7           the person has opposed a discriminatory practice, or
 
 8           because the person has made a charge, filed a
 
 9           complaint, testified, assisted, or participated in an
 
10           investigation, proceeding, or hearing under this
 
11           chapter;
 
12      (2)  To aid, abet, incite, or coerce a person to engage in a
 
13           discriminatory practice;
 
14      (3)  To interfere with any person in the exercise or
 
15           enjoyment of any right granted or protected by this
 
16           chapter or with the performance of a duty or the
 
17           exercise of a power by the commission;
 
18      (4)  To obstruct or prevent a person from complying with
 
19           this chapter or an order issued thereunder;
 
20      (5)  To intimidate or threaten any person engaging in
 
21           activities designed to make other persons aware of, or
 
22           encouraging such other persons to exercise rights
 
23           granted or protected by this chapter; or
 

 
a                                                     GOV-14(99)
Page 147                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1      (6)  To threaten, intimidate or interfere with persons in
 
 2           their enjoyment of a housing accommodation because of
 
 3           the race, sex, color, religion, marital or reciprocal
 
 4           beneficiary status, familial status, ancestry,
 
 5           disability, age, or HIV infection of such persons, or
 
 6           of visitors or associates of such persons."
 
 7      SECTION 81.  Section 525-4, Hawaii Revised Statutes, is
 
 8 amended to read as follows:
 
 9      "[[]525-4[]]  Exclusions from statutory rule against
 
10 perpetuities.  Section 525-1 shall not apply to:
 
11      (1)  A fiduciary's power to sell, lease, or mortgage
 
12           property, and the power of a fiduciary to determine
 
13           principal and income;
 
14      (2)  A discretionary power of a trustee to distribute
 
15           principal before termination of a trust;
 
16      (3)  A nonvested property interest held by a charity,
 
17           government, or governmental agency or subdivision, if
 
18           the nonvested property interest is preceded by an
 
19           interest held by another charity, government, or
 
20           governmental agency or subdivision;
 
21      (4)  A property interest in or a power of appointment with
 
22           respect to a pension, profit-sharing, stock bonus,
 
23           health, disability, death benefit, income deferral, or
 

 
a                                                     GOV-14(99)
Page 148                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1           other current or deferred benefit plan for one or more
 
 2           employees, independent contractors, or their
 
 3           beneficiaries[ or], spouses[;], or reciprocal
 
 4           beneficiaries; or
 
 5      (5)  A property interest, power of appointment, or
 
 6           arrangement that was not subject to the common-law rule
 
 7           against perpetuities or is excluded by any other
 
 8           applicable law."
 
 9      SECTION 82.  Section 532-7, Hawaii Revised Statutes, is
 
10 amended to read as follows:
 
11      "532-7  From persons born to parents not married to each
 
12 other.  If any person born to parents not married to each other
 
13 dies intestate, without leaving lawful issue, [or] a spouse, or a
 
14 reciprocal beneficiary, the decedent's estate shall descend to
 
15 the decedent's mother; but if the decedent leaves a spouse[,] or
 
16 a reciprocal beneficiary, the spouse or reciprocal beneficiary
 
17 shall take one-half, and the decedent's mother the other half,
 
18 and if the decedent's mother is not living, but the decedent's
 
19 spouse or reciprocal beneficiary is, then the spouse or
 
20 reciprocal beneficiary shall take one-half, and the remaining
 
21 half shall go to the decedent's brothers and sisters in equal
 
22 parts, the children of any deceased brother or sister taking by
 
23 right of representation.  In default of surviving brothers or
 

 
a                                                     GOV-14(99)
Page 149                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 sisters, or their issue, such one-half shall go to the brothers
 
 2 and sisters of the decedent's mother in equal shares, the issue
 
 3 of any such brother or sister who is deceased, taking by right of
 
 4 representation.  In default of any relatives as are in this
 
 5 section mentioned, the half, and the whole in the event that the
 
 6 decedent leaves no spouse[,] or reciprocal beneficiary, shall go
 
 7 to the decedent's next of kin.  No action shall be commenced or
 
 8 prosecuted on behalf of the State to recover or hold any property
 
 9 which but for this section, might have been held to have
 
10 escheated to the State."
 
11      SECTION 83.  Section 551D-2.5, Hawaii Revised Statutes, is
 
12 amended by amending subsection (b) to read as follows:
 
13      "(b)  The durable power of attorney made pursuant to this
 
14 section:
 
15      (1)  Shall be in writing;
 
16      (2)  Shall be signed by the principal, or by another person
 
17           in the principal's presence and at the principal's
 
18           expressed direction;
 
19      (3)  Shall be dated;
 
20      (4)  Shall be signed in the presence of two or more
 
21           witnesses who:
 
22           (A)  Are at least eighteen years of age;
 
23           (B)  Are not related to the principal by blood,
 

 
a                                                     GOV-14(99)
Page 150                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1                marriage, reciprocal beneficiary relationship, or
 
 2                adoption; and
 
 3           (C)  Are not, at the time that the durable power of
 
 4                attorney is executed, attending physicians,
 
 5                employees of an attending physician, or employees
 
 6                of a health care facility in which the principal
 
 7                is a patient; and
 
 8      (5)  Shall have all signatures notarized at the same time."
 
 9      SECTION 84.  Section 551D-2.6, Hawaii Revised Statutes, is
 
10 amended to read as follows:
 
11      "[[]551D-2.6[]]  Durable power of attorney sample form.
 
12 The following sample form may be copied and used by filling in
 
13 the blanks or may be changed to add more individualized
 
14 instructions; or an entirely different format may be used to
 
15 provide health care instructions.
 
16        DURABLE POWER OF ATTORNEY FOR HEALTH CARE DECISIONS
 
17      A.   Statement of Principal
 
18      Declaration made this ___ day of __________ (month, year).
 
19 I, __________, being of sound mind, and understanding that I have
 
20 the right to request that my life be prolonged to the greatest
 
21 extent possible, wilfully and voluntarily make known my desire
 
22 that my attorney-in-fact ("agent") shall be authorized as set
 
23 forth below and do hereby declare:
 

 
a                                                     GOV-14(99)
Page 151                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1      My instructions shall prevail even if they create a conflict
 
 2 with the desires of my relatives[,] including reciprocal
 
 3 beneficiaries, hospital policies, or the principles of those
 
 4 providing my care.
 
 5                             CHECKLIST
 
 6      I have considered the extent of the authority I want my
 
 7 agent to have with respect to health care decisions if I should
 
 8 develop a terminal condition or a permanent loss of the ability
 
 9 to communicate concerning medical treatment decisions with no
 
10 reasonable chance of regaining this ability.  I want my agent to
 
11 request care, including medicine and procedures, for the purpose
 
12 of providing comfort and pain relief.  I have also considered
 
13 whether my agent should have the authority to decide whether or
 
14 not my life should be prolonged, and have selected one of the
 
15 following provisions by putting a mark in the space provided:
 
16      ( ) My agent is authorized to decide whether my life should
 
17 be prolonged through surgery, resuscitation, life sustaining
 
18 medicine or procedures, and tube or other artificial feeding or
 
19 provisions of fluids by a tube.
 
20      ( ) My agent is authorized to decide whether my life should
 
21 be prolonged through tube or other artificial feeding or
 
22 provisions of fluids by a tube.
 
23      If neither provision is selected, it shall be presumed that
 

 
a                                                     GOV-14(99)
Page 152                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 my agent shall have only the power to request care, including
 
 2 medicine and procedures, for the purpose of providing comfort and
 
 3 pain relief.
 
 4      This durable power of attorney shall control in all
 
 5 circumstances.  I understand that my physician may not act as my
 
 6 agent under this durable power of attorney.
 
 7 *18664 I understand the full meaning of this durable power of
 
 8 attorney and I am emotionally and mentally competent to make this
 
 9 declaration.
 
10 
 
11 Signed _______________________
 
12 Address ______________________
 
13 B.   Statement of Witnesses
 
14      I am at least eighteen years of age and
 
15      -not related to the principal by blood, marriage, reciprocal
 
16 beneficiary relationship, or adoption; and
 
17      -not currently the attending physician, an employee of the
 
18 attending physician, or an employee of the health care facility
 
19 in which the principal is a patient.
 
20      The principal is personally known to me and I believe the
 
21 principal to be of sound mind.
 
22 
 
23 Witness ______________________
 

 
a                                                     GOV-14(99)
Page 153                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 Address ______________________
 
 2 Witness ______________________
 
 3 Address ______________________
 
 4 C. Statement of Agent
 
 5      I am at least eighteen years of age, I accept the
 
 6 appointment under this durable power of attorney as the attorney-
 
 7 in-fact ("agent") of the principal, and I am not the physician of
 
 8 the principal.  The principal is personally known to me and I
 
 9 believe the principal to be of sound mind.
 
10 
 
11 Agent ________________________
 
12 Address ______________________
 
13 D.  Notarization
 
14      Subscribed, sworn to and acknowledged before me by
 
15 __________, the principal, and subscribed and sworn to before me
 
16 by __________ and __________, witnesses, this ___ day of
 
17 __________, 19 ___.
 
18 
 
19 (SEAL)                          Signed _______________________
 
20                                 ______________________________
 
21                                 (Official capacity of officer)"
 
22      SECTION 85.  Section 572C-2, Hawaii Revised Statutes, is
 
23 amended to read as follows:
 

 
a                                                     GOV-14(99)
Page 154                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1      [[]572C-2[]]  Findings.  The legislature finds that the
 
 2 people of Hawai`i choose to preserve the tradition of marriage as
 
 3 a unique social institution based upon the committed union of one
 
 4 man and one woman.  The legislature further finds that because of
 
 5 its unique status, marriage provides access to a multiplicity of
 
 6 rights and benefits throughout our laws that are contingent upon
 
 7 that status.  As such, marriage should be subject to restrictions
 
 8 such as prohibiting respective parties to a valid marriage
 
 9 contract from standing in relation to each other, i.e. brother
 
10 and sisters of the half as well as to the whole blood, uncle and
 
11 niece, aunt and nephew.
 
12      However, the legislature concurrently acknowledges that
 
13 [there are] many [individuals who] couples have significant
 
14 personal, emotional, and economic relationships [with another
 
15 individual] yet are prohibited [by such legal restrictions] from
 
16 marrying.  [For example, two individuals who are related to one
 
17 another, such as a widowed mother and her unmarried son, or two
 
18 individuals who are of the same gender.]  Therefore, the
 
19 legislature believes that certain rights and benefits presently
 
20 available only to married couples should be made available to
 
21 same gender couples [comprised of two individuals who are legally
 
22 prohibited from marrying one another.] who enter into a
 
23 reciprocal beneficiary relationship as provided in this chapter.
 

 
a                                                     GOV-14(99)
Page 155                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1      SECTION 86.  Section 572C-4, Hawaii Revised Statutes, is
 
 2 amended to read as follows:
 
 3      "[[]572C-4[]]  Requisites of a valid reciprocal beneficiary
 
 4 relationship.  In order to enter into a valid reciprocal
 
 5 beneficiary relationship, it shall be necessary that:
 
 6      (1)  Each of the parties be at least eighteen years old;
 
 7      (2)  Neither of the parties be married nor a party to
 
 8           another reciprocal beneficiary relationship;
 
 9      (3)  The parties be legally prohibited from marrying one
 
10           another under chapter 572;
 
11      (4)  The respective parties do not stand in relation to each
 
12           other of ancestor and descendant of any degree
 
13           whatsoever, brother and sister of the half as well as
 
14           to the whole blood, uncle and niece, aunt and nephew,
 
15           whether the relationship is the result of the issue of
 
16           parents married or not married to each other;
 
17      [(4)] (5)  Consent of either party to the reciprocal
 
18           beneficiary relationship has not been obtained by
 
19           force, duress, or fraud; and
 
20      [(5)] (6)  Each of the parties sign a declaration of
 
21           reciprocal beneficiary relationship as provided in
 
22           section 572C-5."
 
23      SECTION 87.  Section 601-3.6, Hawaii Revised Statutes, is
 

 
a                                                     GOV-14(99)
Page 156                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 amended by amending subsection (b) to read as follows:
 
 2      "(b)  The proceeds of the account shall be reserved for use
 
 3 by the judiciary for staff programs, and grants or purchases of
 
 4 service, consistent with chapter 42D, that support or provide
 
 5 spouse, reciprocal beneficiary, or child abuse intervention or
 
 6 prevention as authorized by law.  These proceeds shall be used
 
 7 for new or existing programs and shall not supplant any other
 
 8 funds previously allocated to these programs.  The account shall
 
 9 be kept separate and apart from all other funds in the treasury."
 
10      SECTION 88.  Section 801D-4, Hawaii Revised Statutes, is
 
11 amended to read as follows:
 
12      "[[]801D-4[]]  Basic bill of rights for victims and
 
13 witnesses.  Upon written request, victims and surviving immediate
 
14 family members (including a reciprocal beneficiary) of crime
 
15 shall have the following rights:
 
16      (1)  To be informed by the police and the prosecuting
 
17           attorney of the final disposition of the case.  If the
 
18           crime charged is a felony, the victim or a surviving
 
19           immediate family member shall be notified of major
 
20           developments in the case and whenever the defendant or
 
21           perpetrator is released from custody.  The victim or a
 
22           surviving immediate family member shall also be
 
23           consulted and advised about plea bargaining by the
 

 
a                                                     GOV-14(99)
Page 157                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1           prosecuting attorney.
 
 2      (2)  To be notified by the prosecuting attorney if a court
 
 3           proceeding to which they have been subpoenaed will not
 
 4           proceed as scheduled.
 
 5      (3)  To receive protection from threats or harm.
 
 6      (4)  To be informed by the police, victim/witness counselor,
 
 7           or other criminal justice personnel, of financial
 
 8           assistance and other social services available as a
 
 9           result of being a witness or a victim of crime,
 
10           including information on how to apply for the
 
11           assistance and services.
 
12      (5)  To be provided by the court, whenever possible, with a
 
13           secure waiting area during court proceedings that does
 
14           not require them to be in close proximity to defendants
 
15           and families and friends of defendants.
 
16      (6)  To have any stolen or other personal property
 
17           expeditiously returned by law enforcement agencies when
 
18           such property is no longer needed as evidence.  If
 
19           feasible, all such property, except weapons, currency,
 
20           contraband, property subject to evidentiary analysis,
 
21           and property, the ownership of which is disputed, shall
 
22           be returned to the person within ten days of being
 
23           taken.
 

 
a                                                     GOV-14(99)
Page 158                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1      (7)  To be informed by the department of public safety of
 
 2           changes planned by the department in the custodial
 
 3           status of the offender that allows or results in the
 
 4           release of the offender into the community, including
 
 5           escape, furlough, work release, placement on supervised
 
 6           release, release on parole, release on bail bond,
 
 7           release on appeal bond, and final discharge at the end
 
 8           of the prison term."
 
 9      SECTION 89.  Section 803-46, Hawaii Revised Statutes, is
 
10 amended by amending subsection (e) to read as follows:
 
11      "(e)  No order entered under this section shall authorize or
 
12 approve the interception of any wire, oral, or electronic
 
13 communication for any period longer than is necessary to achieve
 
14 the objective of the authorization, nor in any event longer than
 
15 thirty days.  The thirty-day period begins on the earlier of the
 
16 day on which the investigative or law enforcement officer first
 
17 begins to conduct an interception under the order or ten days
 
18 after the order is entered.  Extensions of an order may be
 
19 granted, but only upon application for an extension made in
 
20 accordance with subsections (a) and (b) of this section and the
 
21 court making the findings required by subsection (c) of this
 
22 section.  The period of extension shall be no longer than the
 
23 authorizing circuit court deems necessary to achieve the purposes
 

 
a                                                     GOV-14(99)
Page 159                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 for which it was granted and in no event for longer than fifteen
 
 2 days.  Every order and extension thereof shall contain a
 
 3 provision that the authorization to intercept shall be executed
 
 4 as soon as practicable, shall be conducted in such a way as to
 
 5 minimize the interception of communications not otherwise subject
 
 6 to interception under this part, and shall terminate upon
 
 7 attainment of the authorized objective, or in any event in thirty
 
 8 days or in fifteen days in case of an extension.  In the event
 
 9 the intercepted communication is in a code or a foreign language,
 
10 and an expert in that foreign language or code is not reasonably
 
11 available during the interception period, minimization may be
 
12 accomplished as soon as practicable after such interception.  An
 
13 interception may be conducted in whole or in part by
 
14 investigative or law enforcement officer(s), or by an individual
 
15 operating under contract, acting under the supervision of an
 
16 investigative or law enforcement officer authorized to conduct
 
17 the interception.
 
18      (1)  The interception shall be conducted in such a way as to
 
19           minimize the resulting invasion of privacy including
 
20           but not limited to the following methods of
 
21           minimization:
 
22           (A)  Conversations that appear unlikely to result in
 
23                incriminating conversations relating to the
 

 
a                                                     GOV-14(99)
Page 160                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1                offense for which the order is issued shall be
 
 2                subject to intermittent monitoring; and
 
 3           (B)  Privileged conversations, including those between
 
 4                a person and the person's spouse, reciprocal
 
 5                beneficiary, attorney, physician, or clergy, shall
 
 6                not be intercepted unless both parties to the
 
 7                conversation are named or described in the
 
 8                application and order.
 
 9      (2)  In determining whether incriminating statements are
 
10           likely to occur during a conversation the following
 
11           factors should be considered:
 
12           (A)  The parties to the conversation;
 
13           (B)  The particular offense being investigated;
 
14           (C)  The subject matter of the conversation;
 
15           (D)  The subject matter of previous conversations
 
16                between the same parties and whether any
 
17                incriminating statements occurred; and
 
18           (E)  The hour and day of conversation."
 
19      SECTION 90.  If any provision of this Act, or the
 
20 application thereof to any person or circumstance is held
 
21 invalid, the invalidity does not affect other provisions or
 
22 applications of the Act which can be given effect without the
 
23 invalid provision or application, and to this end the provision
 

 
a                                                     GOV-14(99)
Page 161                                                   1315
                                     S.B. NO.           
                                                        
                                                        

 
 1 of this Act are severable.
 
 2      SECTION 91.  Statutory material to be repealed is bracketed.
 
 3 New statutory material is underscored.
 
 4      SECTION 92.  This Act shall take effect on July 1, 1999.
 
 5 
 
 6                           INTRODUCED BY:  _______________________
 

 
a                                                     GOV-14(99)