[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 2121 Introduced in Senate (IS)]







110th CONGRESS
  1st Session
                                S. 2121

 To provide funding and incentives for caregiver support and long-term 
                            care assistance.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            October 1, 2007

 Mr. Menendez (for himself, Mr. Lautenberg, and Mr. Durbin) introduced 
the following bill; which was read twice and referred to the Committee 
                               on Finance

_______________________________________________________________________

                                 A BILL


 
 To provide funding and incentives for caregiver support and long-term 
                            care assistance.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Caregiver Assistance and Relief 
Effort Act of 2007'' or as the ``CARE Act of 2007''.

SEC. 2. INCREASED FUNDING FOR NATIONAL FAMILY CAREGIVER SUPPORT 
              PROGRAM.

    (a) In General.--Section 303(e) of the Older Americans Act of 1965 
(42 U.S.C. 3023(e)) is amended--
            (1) in paragraph (1), by striking ``$160,000,000'' and all 
        that follows and inserting ``$250,000,000 for fiscal year 
        2008.''; and
            (2) in paragraph (2), by striking ``$166,500,000'' and all 
        that follows and inserting ``$250,000,000 for each of fiscal 
        years 2009 through 2011.''.
    (b) Native Americans.--Section 643(2) of the Older Americans Act of 
1965 (42 U.S.C. 3057n(2)) is amended by striking ``$6,500,000'' and all 
that follows and inserting ``$10,000,000 for each of fiscal years 2008 
through 2011.''.

SEC. 3. CREDIT FOR TAXPAYERS WITH LONG-TERM CARE NEEDS.

    (a) In General.--Subpart C of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to refundable credits) 
is amended by redesignating section 36 as section 37 and by inserting 
after section 35 the following new section:

``SEC. 36. CREDIT FOR TAXPAYERS WITH LONG-TERM CARE NEEDS.

    ``(a) Allowance of Credit.--
            ``(1) In general.--There shall be allowed as a credit 
        against the tax imposed by this chapter for the taxable year an 
        amount equal to the applicable amount multiplied by the number 
        of applicable individuals with respect to whom the taxpayer is 
        an eligible caregiver for the taxable year.
            ``(2) Applicable amount.--For purposes of paragraph (1), 
        the applicable amount shall be determined in accordance with 
        the following table:

 
 
 
2008.......................................................       $2,500
2009.......................................................       $2,750
2010 or thereafter.........................................      $3,000.
 

    ``(b) Limitation Based on Adjusted Gross Income.--
            ``(1) In general.--The amount of the credit allowable under 
        subsection (a) shall be reduced (but not below zero) by $100 
        for each $1,000 (or fraction thereof) by which the taxpayer's 
        modified adjusted gross income exceeds the threshold amount. 
        For purposes of the preceding sentence, the term `modified 
        adjusted gross income' means adjusted gross income increased by 
        any amount excluded from gross income under section 911, 931, 
        or 933.
            ``(2) Threshold amount.--For purposes of paragraph (1), the 
        term `threshold amount' means $75,000 (twice such amount in the 
        case of joint return).
            ``(3) Indexing.--In the case of any taxable year beginning 
        in a calendar year after 2008, the $75,000 amount contained in 
        paragraph (2) shall be increased by an amount equal to the 
        product of--
                    ``(A) such dollar amount, and
                    ``(B) the medical care cost adjustment determined 
                under section 213(d)(10)(B)(ii) for the calendar year 
                in which the taxable year begins, determined by 
                substituting `2007' for `1996' in subclause (II) 
                thereof.
        If any increase determined under the preceding sentence is not 
        a multiple of $50, such increase shall be rounded to the next 
        lowest multiple of $50.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Applicable individual.--
                    ``(A) In general.--The term `applicable individual' 
                means, with respect to any taxable year, any individual 
                who has been certified, before the due date for filing 
                the return of tax for the taxable year (without 
                extensions), by a physician (as defined in section 
                1861(r)(1) of the Social Security Act) as being an 
                individual with long-term care needs described in 
                subparagraph (B) for a period--
                            ``(i) which is at least 180 consecutive 
                        days, and
                            ``(ii) a portion of which occurs within the 
                        taxable year.
                Such term shall not include any individual otherwise 
                meeting the requirements of the preceding sentence 
                unless within the 39\1/2\ month period ending on such 
                due date (or such other period as the Secretary 
                prescribes) a physician (as so defined) has certified 
                that such individual meets such requirements.
                    ``(B) Individuals with long-term care needs.--An 
                individual is described in this subparagraph if the 
                individual meets any of the following requirements:
                            ``(i) The individual is at least 18 years 
                        of age and--
                                    ``(I) is unable to perform (without 
                                substantial assistance from another 
                                individual) at least 3 activities of 
                                daily living (as defined in section 
                                7702B(c)(2)(B)) due to a loss of 
                                functional capacity, or
                                    ``(II) requires substantial 
                                supervision to protect such individual 
                                from threats to health and safety due 
                                to severe cognitive impairment and is 
                                unable to perform at least 1 activity 
                                of daily living (as so defined) or to 
                                the extent provided in regulations 
                                prescribed by the Secretary (in 
                                consultation with the Secretary of 
                                Health and Human Services), is unable 
                                to engage in age appropriate 
                                activities.
                            ``(ii) The individual is at least 6 but not 
                        18 years of age and--
                                    ``(I) is unable to perform (without 
                                substantial assistance from another 
                                individual) at least 3 activities of 
                                daily living (as defined in section 
                                7702B(c)(2)(B)) due to a loss of 
                                functional capacity,
                                    ``(II) requires substantial 
                                supervision to protect such individual 
                                from threats to health and safety due 
                                to severe cognitive impairment and is 
                                unable to perform at least 1 activity 
                                of daily living (as so defined) or to 
                                the extent provided in regulations 
                                prescribed by the Secretary (in 
                                consultation with the Secretary of 
                                Health and Human Services), is unable 
                                to engage in age appropriate 
                                activities,
                                    ``(III) has a level of disability 
                                similar to the level of disability 
                                described in subclause (I) (as 
                                determined under regulations 
                                promulgated by the Secretary), or
                                    ``(IV) has a complex medical 
                                condition (as defined by the Secretary) 
                                that requires medical management and 
                                coordination of care.
                            ``(iii) The individual is at least 2 but 
                        not 6 years of age and--
                                    ``(I) is unable due to a loss of 
                                functional capacity to perform (without 
                                substantial assistance from another 
                                individual) at least 2 of the following 
                                activities: eating, transferring, or 
                                mobility,
                                    ``(II) has a level of disability 
                                similar to the level of disability 
                                described in subclause (I) (as 
                                determined under regulations 
                                promulgated by the Secretary), or
                                    ``(III) has a complex medical 
                                condition (as defined by the Secretary) 
                                that requires medical management and 
                                coordination of care.
                            ``(iv) The individual is under 2 years of 
                        age and--
                                    ``(I) requires specific durable 
                                medical equipment by reason of a severe 
                                health condition or requires a skilled 
                                practitioner trained to address the 
                                individual's condition to be available 
                                if the individual's parents or 
                                guardians are absent,
                                    ``(II) has a level of disability 
                                similar to the level of disability 
                                described in subclause (I) (as 
                                determined under regulations 
                                promulgated by the Secretary), or
                                    ``(III) has a complex medical 
                                condition (as defined by the Secretary) 
                                that requires medical management and 
                                coordination of care.
                            ``(v) The individual has 5 or more chronic 
                        conditions (as defined in subparagraph (C)) and 
                        is unable to perform (without substantial 
                        assistance from another individual) at least 1 
                        activity of daily living (as so defined) due to 
                        a loss of functional capacity.
                    ``(C) Chronic condition.--For purposes of this 
                paragraph, the term `chronic condition' means a 
                condition that lasts for at least 6 consecutive months 
                and requires ongoing medical care.
            ``(2) Eligible caregiver.--A taxpayer shall be treated as 
        an eligible caregiver for any taxable year with respect to the 
        taxpayer and the taxpayer's spouse and dependents. A taxpayer 
        shall not be treated as an eligible caregiver with respect to 
        himself for any taxable year beginning in any calendar year if 
        any other person is an eligible caregiver with respect to the 
        taxpayer for a taxable year which begins in such calendar year.
    ``(d) Identification Requirement.--No credit shall be allowed under 
this section to a taxpayer with respect to any applicable individual 
unless the taxpayer includes the name and taxpayer identification 
number of such individual, and the identification number of the 
physician certifying such individual, on the return of tax for the 
taxable year.
    ``(e) Taxable Year Must Be Full Taxable Year.--Except in the case 
of a taxable year closed by reason of the death of the taxpayer, no 
credit shall be allowable under this section in the case of a taxable 
year covering a period of less than 12 months.''.
    (b) Conforming Amendments.--
            (1) Section 6213(g)(2) of the Internal Revenue Code of 1986 
        is amended by striking ``and'' at the end of subparagraph (L), 
        by striking the period at the end of subparagraph (M) and 
        inserting ``, and'', and by inserting after subparagraph (M) 
        the following new subparagraph:
                    ``(N) an omission of a correct TIN or physician 
                identification required under section 36(d) (relating 
                to credit for taxpayers with long-term care needs) to 
                be included on a return.''.
            (2) The table of sections for subpart C of part IV of 
        subchapter A of chapter 1 of such Code is amended by 
        redesignating the item relating to section 36 as an item 
        relating to section 37 and by inserting before such item the 
        following new item:

``Sec. 36. Credit for taxpayers with long-term care needs.''.
            (3) Section 1324(b)(2) of title 31, United States Code, is 
        amended by inserting ``or 36'' after ``section 35''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2007.

SEC. 4. TREATMENT OF PREMIUMS ON QUALIFIED LONG-TERM CARE INSURANCE 
              CONTRACTS.

    (a) In General.--Part VII of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 (relating to additional itemized 
deductions) is amended by redesignating section 224 as section 225 and 
by inserting after section 223 the following new section:

``SEC. 224. PREMIUMS ON QUALIFIED LONG-TERM CARE INSURANCE CONTRACTS.

    ``(a) In General.--In the case of an individual, there shall be 
allowed as a deduction an amount equal to the applicable percentage of 
the amount of eligible long-term care premiums (as defined in section 
213(d)(10)) paid during the taxable year for coverage for the taxpayer 
and the taxpayer's spouse and dependents under a qualified long-term 
care insurance contract (as defined in section 7702B(b)).
    ``(b) Applicable Percentage.--For purposes of subsection (a)--
            ``(1) In general.--Except as otherwise provided in this 
        subsection, the applicable percentage shall be determined in 
        accordance with the following table based on the number of 
        years of continuous coverage (as of the close of the taxable 
        year) of the individual under any qualified long-term care 
        insurance contracts (as defined in section 7702B(b)):

                ``If the number of years of
                                                         The applicable
                      continuous coverage is--
                                                        percentage is--
                    Less than 1............................         60 
                    At least 1 but less than 2.............         70 
                    At least 2 but less than 3.............         80 
                    At least 3 but less than 4.............         90 
                    At least 4.............................        100.
            ``(2) Special rules for individuals who have attained age 
        55.--In the case of an individual who has attained age 55 as of 
        the close of the taxable year, the following table shall be 
        substituted for the table in paragraph (1):

                ``If the number of years of
                                                         The applicable
                      continuous coverage is--
                                                        percentage is--
                    Less than 1............................         70 
                    At least 1 but less than 2.............         85 
                    At least 2.............................        100.
            ``(3) Only coverage after 2007 taken into account.--Only 
        coverage for periods after December 31, 2007, shall be taken 
        into account under this subsection.
            ``(4) Continuous coverage.--An individual shall not fail to 
        be treated as having continuous coverage if the aggregate 
        breaks in coverage during any 1-year period are less than 60 
        days.
    ``(c) Coordination With Other Deductions.--Any amount paid by a 
taxpayer for any qualified long-term care insurance contract to which 
subsection (a) applies shall not be taken into account in computing the 
amount allowable to the taxpayer as a deduction under section 162(l) or 
213(a).''.
    (b) Conforming Amendments.--
            (1) Section 62(a) of the Internal Revenue Code of 1986 is 
        amended by inserting before the last sentence the following new 
        paragraph:
            ``(22) Premiums on qualified long-term care insurance 
        contracts.--The deduction allowed by section 224.''.
            (2) The table of sections for part VII of subchapter B of 
        chapter 1 of such Code is amended by redesignating the item 
        relating to section 224 as an item relating to section 225 and 
        by inserting before such item the following new item:

``Sec. 224. Premiums on qualified long-term care insurance 
                            contracts.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2007.

SEC. 5. ADDITIONAL CONSUMER PROTECTIONS FOR LONG-TERM CARE INSURANCE.

    (a) Additional Protections Applicable to Long-Term Care 
Insurance.--Subparagraphs (A) and (B) of section 7702B(g)(2) of the 
Internal Revenue Code of 1986 (relating to requirements of model 
regulation and Act) are amended to read as follows:
                    ``(A) In general.--The requirements of this 
                paragraph are met with respect to any contract if such 
                contract meets--
                            ``(i) Model regulation.--The following 
                        requirements of the model regulation:
                                    ``(I) Section 6A (relating to 
                                guaranteed renewal or 
                                noncancellability), other than 
                                paragraph (5) thereof, and the 
                                requirements of section 6B of the model 
                                Act relating to such section 6A.
                                    ``(II) Section 6B (relating to 
                                prohibitions on limitations and 
                                exclusions) other than paragraph (7) 
                                thereof.
                                    ``(III) Section 6C (relating to 
                                extension of benefits).
                                    ``(IV) Section 6D (relating to 
                                continuation or conversion of 
                                coverage).
                                    ``(V) Section 6E (relating to 
                                discontinuance and replacement of 
                                policies).
                                    ``(VI) Section 7 (relating to 
                                unintentional lapse).
                                    ``(VII) Section 8 (relating to 
                                disclosure), other than sections 8F, 
                                8G, 8H, and 8I thereof.
                                    ``(VIII) Section 11 (relating to 
                                prohibitions against post-claims 
                                underwriting).
                                    ``(IX) Section 12 (relating to 
                                minimum standards).
                                    ``(X) Section 13 (relating to 
                                requirement to offer inflation 
                                protection).
                                    ``(XI) Section 25 (relating to 
                                prohibition against preexisting 
                                conditions and probationary periods in 
                                replacement policies or certificates).
                                    ``(XII) The provisions of section 
                                26 relating to contingent nonforfeiture 
                                benefits, if the policyholder declines 
                                the offer of a nonforfeiture provision 
                                described in paragraph (4).
                            ``(ii) Model act.--The following 
                        requirements of the model Act:
                                    ``(I) Section 6C (relating to 
                                preexisting conditions).
                                    ``(II) Section 6D (relating to 
                                prior hospitalization).
                                    ``(III) The provisions of section 8 
                                relating to contingent nonforfeiture 
                                benefits, if the policyholder declines 
                                the offer of a nonforfeiture provision 
                                described in paragraph (4).
                    ``(B) Definitions.--For purposes of this 
                paragraph--
                            ``(i) Model provisions.--The terms `model 
                        regulation' and `model Act' mean the long-term 
                        care insurance model regulation, and the long-
                        term care insurance model Act, respectively, 
                        promulgated by the National Association of 
                        Insurance Commissioners (as adopted as of 
                        October 2000).
                            ``(ii) Coordination.--Any provision of the 
                        model regulation or model Act listed under 
                        clause (i) or (ii) of subparagraph (A) shall be 
                        treated as including any other provision of 
                        such regulation or Act necessary to implement 
                        the provision.
                            ``(iii) Determination.--For purposes of 
                        this section and section 4980C, the 
                        determination of whether any requirement of a 
                        model regulation or the model Act has been met 
                        shall be made by the Secretary.''.
    (b) Excise Tax.--Paragraph (1) of section 4980C(c) of the Internal 
Revenue Code of 1986 (relating to requirements of model provisions) is 
amended to read as follows:
            ``(1) Requirements of model provisions.--
                    ``(A) Model regulation.--The following requirements 
                of the model regulation must be met:
                            ``(i) Section 9 (relating to required 
                        disclosure of rating practices to consumer).
                            ``(ii) Section 14 (relating to application 
                        forms and replacement coverage).
                            ``(iii) Section 15 (relating to reporting 
                        requirements).
                            ``(iv) Section 22 (relating to filing 
                        requirements for marketing).
                            ``(v) Section 23 (relating to standards for 
                        marketing), including inaccurate completion of 
                        medical histories, other than paragraphs (1), 
                        (6), and (9) of section 23C.
                            ``(vi) Section 24 (relating to 
                        suitability).
                            ``(vii) Section 29 (relating to standard 
                        format outline of coverage).
                            ``(viii) Section 30 (relating to 
                        requirement to deliver shopper's guide).
                The requirements referred to in clause (vi) shall not 
                include those portions of the personal worksheet 
                described in appendix B relating to consumer protection 
                requirements not imposed by section 4980C or 7702B.
                    ``(B) Model act.--The following requirements of the 
                model Act must be met:
                            ``(i) Section 6F (relating to right to 
                        return).
                            ``(ii) Section 6G (relating to outline of 
                        coverage).
                            ``(iii) Section 6H (relating to 
                        requirements for certificates under group 
                        plans).
                            ``(iv) Section 6J (relating to policy 
                        summary).
                            ``(v) Section 6K (relating to monthly 
                        reports on accelerated death benefits).
                            ``(vi) Section 7 (relating to 
                        incontestability period).
                    ``(C) Definitions.--For purposes of this paragraph, 
                the terms `model regulation' and `model Act' have the 
                meanings given such terms by section 7702B(g)(2)(B).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to policies issued more than 1 year after the date of the 
enactment of this Act.
                                 <all>