State Fiscal Highlights
· No direct fiscal effect on the state.
Local Fiscal Highlights
· Probate courts could experience an increase in caseload and administrative costs to hear and determine petitions for involuntary drug and alcohol treatment, to train staff, to manage contempt of court proceedings including incarceration, and to provide court appointed counsel and independent expert evaluation if the respondent is indigent. The annual magnitude of those increased costs could exceed minimal for certain probate courts.
Detailed Fiscal Analysis
State trust and probate law
The bill makes various changes to the state's trust and probate laws, most notably by enacting the Uniform Power of Attorney Act, modifying certain aspects of the Ohio Trust Code, modifying the anti-lapse statute regarding wills, and creating the anti-lapse statute for trusts. For the most part, changes made by the bill do not significantly impact the state or any local government entities. To the extent that an entity might be affected, any impact is expected to be minimal and would likely consist of administrative costs for probate courts to apply and construe the Uniform Power of Attorney Act. The bill specifies that the Uniform Power of Attorney Act would become effective October 1, 2010.
Changes to the trust income tax credit
Under the income tax law, some trusts are subject to the income tax on at least a portion of the trust's income. Trusts may claim a credit for taxes paid to another state on their accumulated qualifying nonbusiness income,[1] and the credit cannot exceed the amount of Ohio tax that would be imposed on that income. Am. Sub. H.B. 562 of the 127th General Assembly limited the income tax credit to "nonresident trusts," i.e., presumably a trust, or part of a trust, that is not a resident trust under applicable law defining "resident" trusts. The bill modifies the trust income tax law by replacing "nonresident" with "resident," thus providing this credit to resident trusts for income tax paid to other states or the District of Columbia. Based on current practices, and according to the Department of Taxation, this provision has a minimal fiscal effect.
Tax formulas in wills and trusts
The bill allows the modification, following private agreement between parties, of the terms of a charitable trust (or a trust that has a charity as a beneficiary) on the disposition or division of property for trusts that do not refer to the repeal of the federal estate tax or the federal generation-skipping transfer tax and the potential effect of that repeal. (Ohio has a state estate tax but not a generation-skipping transfer tax.) The bill specifies the rule of construction in wills and charitable trusts regarding the interpretation of the federal estate tax or generation-skipping transfer tax for distributions of benefits or allocation of charges (including transfer taxes) from estates or charitable trusts. Assuming that the modification of the terms of the trusts does not affect payment of state estate taxes where required and that, generally, charitable trusts have no or little state income tax liability, this provision is likely to have little state or local fiscal effects, if any.
Court-ordered treatment for drug and alcohol abuse
Order for involuntary treatment
Probate courts could experience an increase in caseload and administrative costs to hear and determine petitions for involuntary drug and alcohol treatment, to train staff, and to manage contempt of court proceedings including incarceration. According to the Ohio Judicial Conference, costs incurred by probate courts to implement these provisions of the bill have the potential to be significant and could necessitate the hiring of additional staff for some courts. Additionally, probate courts could incur costs to provide court-appointed counsel and independent expert evaluations, if desired, to indigent respondents. The bill does not address how a petition would be handled or who would pay for treatment and court costs in the case that the petitioner is indigent or otherwise unable to pay for treatment.
The bill provides a mechanism for probate courts, under certain conditions, to order involuntary drug and alcohol treatment by permitting a spouse, relative, or guardian of an individual experiencing alcohol or other drug abuse to file a verified petition with the court. The bill explicitly requires that any petition filed with the court must be accompanied by a signed guarantee obligating the petitioner, or other authorized individual, to pay all costs of the respondent's treatment including related court and transportation costs. The bill establishes a procedure for probate courts when determining whether an individual should be ordered to undergo drug and alcohol treatment including: (1) examining the petitioner under oath, (2) causing the respondent to undergo a physical evaluation and a drug and alcohol addiction assessment and diagnosis, (3) conducting a hearing, and (4) ordering treatment. If a respondent is indigent, the bill requires that court-appointed counsel and independent expert evaluation, if desired, be provided at the public's expense. The bill requires a probate court to dismiss the proceedings if the court determines probable cause does not exist or if the petition is withdrawn. If a respondent fails to undergo treatment as ordered, the respondent is in contempt of court.
Involuntary hospitalizations
The bill allows the probate court, under certain conditions resulting from alcohol or other drug use, to order the respondent to be hospitalized for up to 72 hours. The bill precludes the respondent from being held in jail unless the probate court has previously found the respondent to be in contempt of court for failure to undergo treatment or failure to appear at an evaluation ordered by a probate court. Current law provides a similar process for involuntary hospitalization for psychiatric medical emergencies. Costs incurred by the probate court for psychiatric hospitalizations, including fees or expenses for police, sheriffs, physicians, witnesses, transportation, conveyance assistants, attorneys, referees, reporters, and court costs, are reimbursed by the Department of Mental Health. From LSC fiscal staff's perspective, it is unclear as to whether probate courts would be entitled to reimbursement for similar expenses resulting from hospitalizations for alcohol or other drug use.
List of hospitals and treatment providers
The bill requires each board of alcohol, drug addiction, and mental health services on at least an annual basis to submit a list of all hospitals and treatment providers served by each county board that are able and willing to provide alcohol and drug services ordered by the probate court. Any costs incurred by the local boards would not likely exceed minimal.
[1]"Non-business income" includes compensation, rents and royalties from real or tangible personal property, capital gains, interest, dividends and distributions, patent or copyright royalties, or lottery winnings, prizes, and awards. The credit excludes "qualifying investment income" as defined in 5747.012 of the Revised Code.
