SRC-SLL S.B. 912 75(R)   BILL ANALYSIS


Senate Research Center   S.B. 912
By: Cain
Jurisprudence
3-12-97
As Filed


DIGEST 

Currently, if a minor or incapacitated person is supported by a trust
funded by a personal injury damage award the minor or person may be deemed
to be ineligible for Medicaid benefits.  In 1993, the federal government
enacted provisions of 42 U.S.C. 1396p(d)(4)(A), which authorizes the court
to create what is referred to as a "special needs trust."  Such a trust
allows a beneficiary to continue to receive Medicaid and SSI benefits
provided the trustee is restricted to using the trust fund to provide
benefits that are not covered under Medicaid.  Texas statutes do not
expressly authorize the creation of special needs trusts and there is no
Texas case law directly on the point.  This bill will authorize the courts
to create special needs trusts for certain minors or incapacitated
persons. 

PURPOSE

As proposed, S.B. 912 authorizes the courts to create special needs trusts
for certain minors or incapacitated persons. 

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section  142.005, Property Code, by adding Subsection
(g), to authorize a trust to contain provisions determined by the court to
be necessary to establish a special needs trust as specified under 42
U.S.C. Section 1396p(d)(4)(A), if the court finds that it would be in the
best interests of the minor or incapacitated person for whom the trust is
created, notwithstanding any other provision of this chapter. 

SECTION 2. Emergency clause.
  Effective date: upon passage.