Texas 2017 - 85th Regular

Texas House Bill HB3224 Compare Versions

Only one version of the bill is available at this time.

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1	1	85R8745 EES-D
2	2	By: Perez H.B. No. 3224
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to requiring dealers and investment advisers to report
8	8	suspected financial abuse of elderly persons; providing a civil
9	9	penalty; creating a criminal offense.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. The Securities Act (Article 581-1 et seq.,
12	12	Vernon's Texas Civil Statutes) is amended by adding Section 45 to
13	13	read as follows:
14	14	Sec. 45. REPORTING OF FINANCIAL ABUSE OF ELDERLY PERSONS.
15	15	A. In this section:
16	16	(1) "Adult protective services division" means the
17	17	adult protective services division of the Department of Family and
18	18	Protective Services.
19	19	(2) "Elderly person" has the meaning assigned by
20	20	Section 48.002, Human Resources Code.
21	21	(3) "Financial abuse" means the wrongful or negligent
22	22	taking, appropriation, obtaining, retention, or use of, or
23	23	assisting in the wrongful or negligent taking, appropriation,
24	24	obtaining, retention, or use of, money or other property of another
25	25	person by any means, including by exerting undue influence. The
26	26	term includes financial exploitation.
27	27	(4) "Financial exploitation" means the wrongful or
28	28	negligent taking, appropriation, obtaining, retention, or use of
29	29	money or other property of another person by a person who has a
30	30	relationship of confidence or trust with the other person.
31	31	Financial exploitation may involve coercion, manipulation,
32	32	threats, intimidation, misrepresentation, or the exerting of undue
33	33	influence. The term includes:
34	34	(A) the breach of a fiduciary relationship,
35	35	including the misuse of a durable power of attorney or the abuse of
36	36	guardianship powers, that results in the unauthorized
37	37	appropriation, sale, or transfer of another person's property;
38	38	(B) the unauthorized taking of personal assets;
39	39	(C) the misappropriation, misuse, or
40	40	unauthorized transfer of another person's money from a personal or
41	41	a joint account; and
42	42	(D) the negligent or intentional failure to
43	43	effectively use another person's income and assets for the
44	44	necessities required for the person's support and maintenance.
45	45	B. For purposes of Subsection A of this section, a person
46	46	has a relationship of confidence or trust with another person if the
47	47	person:
48	48	(1) is a parent, spouse, adult child, or other
49	49	relative by blood or marriage of the other person;
50	50	(2) is a joint tenant or tenant-in-common with the
51	51	other person;
52	52	(3) has a legal or fiduciary relationship with the
53	53	other person;
54	54	(4) is a financial planner or investment professional
55	55	who provides services to the other person; or
56	56	(5) is a paid or unpaid caregiver of the other person.
57	57	C. Notwithstanding any other law, if an agent or investment
58	58	adviser representative has a good faith belief that financial abuse
59	59	of an elderly person has occurred or is occurring, the agent or
60	60	investment adviser representative shall immediately notify the
61	61	dealer or investment adviser, as appropriate, for whom the agent or
62	62	investment adviser representative is providing services.
63	63	D. On receiving the notification made under Subsection C of
64	64	this section or if a dealer or investment adviser has a good faith
65	65	belief that financial abuse of an elderly person has occurred or is
66	66	occurring, the dealer or investment adviser, as appropriate, shall:
67	67	(1) subject to Subchapter B-1, Chapter 48, Human
68	68	Resources Code, make a report notifying the adult protective
69	69	services division of the suspected financial abuse; and
70	70	(2) notify the appropriate local law enforcement
71	71	agency with jurisdiction over the municipality or county in which
72	72	the elderly person resides of the suspected financial abuse for
73	73	purposes of investigating and determining whether an offense under
74	74	Section 32.53, Penal Code, or other law has occurred.
75	75	E. The report and notification required by Subsection D of
76	76	this section must be made:
77	77	(1) by telephone or electronic means, not later than
78	78	24 hours after the dealer or investment adviser receives
79	79	notification of suspected financial abuse or believes in good faith
80	80	that suspected financial abuse occurred or is occurring; and
81	81	(2) in writing, not later than the third business day
82	82	after the date the dealer or investment adviser receives
83	83	notification of suspected financial abuse or believes in good faith
84	84	that suspected financial abuse occurred or is occurring.
85	85	F. For purposes of Subsection C of this section, a person's
86	86	good faith belief must be acquired in connection with the provision
87	87	of services by the person to or on behalf of the elderly person and
88	88	must be based on:
89	89	(1) the person's observation or knowledge of an
90	90	incident of suspected financial abuse, if the person has direct
91	91	contact with the elderly person; or
92	92	(2) the presence of information indicating potential
93	93	financial abuse during a review or approval process performed by
94	94	the person in connection with the provision of services, if the
95	95	person does not have direct contact with the elderly person but
96	96	reviews or approves the elderly person's transactions, documents,
97	97	or records.
98	98	G. Nothing in this section shall be construed to require a
99	99	dealer or investment adviser to investigate an allegation of
100	100	financial abuse made by an elderly person or other person.
101	101	H. Except as provided by Subsection I of this section, the
102	102	following information is confidential and is not subject to
103	103	disclosure to the public, except under court order:
104	104	(1) the information contained in a report or
105	105	notification made under Subsection D of this section;
106	106	(2) the identity of any informing agent or investment
107	107	adviser representative under Subsection C of this section or the
108	108	name of the dealer or investment adviser making the report or
109	109	notification under Subsection D of this section; and
110	110	(3) information provided by or submitted to a dealer
111	111	or investment adviser in connection with an investigation arising
112	112	out of a report or notification made under Subsection D of this
113	113	section.
114	114	I. Information that is confidential under Subsection H of
115	115	this section may be disclosed only:
116	116	(1) to the adult protective services division or
117	117	another state agency, a law enforcement agency, or the attorney
118	118	general, in connection with the reporting or notification of or an
119	119	investigation of suspected financial abuse of the elderly person to
120	120	whom the information pertains;
121	121	(2) to, or as authorized by, the elderly person or the
122	122	guardian of the elderly person, unless the dealer or investment
123	123	adviser suspects the guardian of financial abuse of the elderly
124	124	person; or
125	125	(3) as part of a civil or criminal action related to
126	126	the suspected financial abuse of the elderly person.
127	127	J. A person commits an offense if the person discloses
128	128	confidential information in violation of this section. An offense
129	129	under this subsection is a Class C misdemeanor.
130	130	K. A dealer or investment adviser that, or an agent or
131	131	investment adviser representative who, makes a report or
132	132	notification in good faith under Subsection C or D of this section
133	133	is immune from any criminal or civil liability arising from:
134	134	(1) the report or notification; or
135	135	(2) participation in any judicial proceeding arising
136	136	from the report or notification.
137	137	L. A dealer or investment adviser that fails to make a
138	138	report or notification in violation of this section is liable to
139	139	this state for a civil penalty in an amount not to exceed $25,000,
140	140	unless a court finds the violation to be wilful, in which case the
141	141	amount of the civil penalty may not exceed $100,000.
142	142	M. The attorney general may bring an action on behalf of
143	143	this state to recover a civil penalty under Subsection L of this
144	144	section.
145	145	N. Subject to Section 48.072, Human Resources Code, the
146	146	Board and the executive commissioner of the Health and Human
147	147	Services Commission, after consulting with the Securities
148	148	Commissioner and the Department of Family and Protective Services,
149	149	shall jointly adopt rules necessary to implement this section,
150	150	including rules that require each dealer or investment adviser to
151	151	implement a training program to:
152	152	(1) assist the agents or investment adviser
153	153	representatives, as appropriate, in recognizing signs of potential
154	154	financial abuse of an elderly person; and
155	155	(2) inform the agents or investment adviser
156	156	representatives, as appropriate, about the reporting and
157	157	notification requirements of this section.
158	158	SECTION 2. Subchapter A, Chapter 48, Human Resources Code,
159	159	is amended by adding Section 48.008 to read as follows:
160	160	Sec. 48.008. CONSOLIDATION OF CERTAIN REPORTS. If
161	161	cost-effective and feasible, the executive commissioner by rule may
162	162	consolidate the form and procedures used to submit a report under
163	163	Sections 48.051 and 48.072.
164	164	SECTION 3. Chapter 48, Human Resources Code, is amended by
165	165	adding Subchapter B-1 to read as follows:
166	166	SUBCHAPTER B-1. FINANCIAL ABUSE OF ELDERLY PERSONS
167	167	Sec. 48.071. DEFINITIONS. In this subchapter:
168	168	(1) "Dealer" and "investment adviser" have the
169	169	meanings assigned by Section 4, The Securities Act (Article 581-4,
170	170	Vernon's Texas Civil Statutes).
171	171	(2) "Financial abuse" has the meaning assigned by
172	172	Section 45, The Securities Act (Article 581-45, Vernon's Texas
173	173	Civil Statutes).
174	174	(3) "Securities board" means the State Securities
175	175	Board.
176	176	Sec. 48.072. CERTAIN REPORTS OF SUSPECTED FINANCIAL ABUSE.
177	177	(a) The executive commissioner, after consultation with the
178	178	securities board, by rule shall prescribe the form and content of
179	179	the report required to be made by a dealer or investment adviser
180	180	under Section 45, The Securities Act (Article 581-45, Vernon's
181	181	Texas Civil Statutes). A report made by a dealer or investment
182	182	adviser under Section 45, The Securities Act (Article 581-45,
183	183	Vernon's Texas Civil Statutes), constitutes a report of suspected
184	184	financial abuse of an elderly person for purposes of this
185	185	subchapter.
186	186	(b) In adopting rules under this section, the executive
187	187	commissioner shall ensure that a report of suspected financial
188	188	abuse of an elderly person described by Subsection (a) includes to
189	189	the extent possible the same information required to be included in
190	190	a report under Section 48.051(d).
191	191	(c) A dealer or investment adviser that makes a report to
192	192	the department of suspected financial abuse of an elderly person
193	193	under Section 45, The Securities Act (Article 581-45, Vernon's
194	194	Texas Civil Statutes), in accordance with this section is not
195	195	required to make an additional report of suspected abuse, neglect,
196	196	or exploitation under Section 48.051 for the same conduct
197	197	constituting the financial abuse reported under this section.
198	198	Sec. 48.073. ASSESSMENT, INVESTIGATION, AND DISPOSITION OF
199	199	REPORTS. (a) The executive commissioner by rule shall adopt
200	200	procedures for the assessment, investigation, and disposition of a
201	201	report of suspected financial abuse of an elderly person received
202	202	under Section 45, The Securities Act (Article 581-45, Vernon's
203	203	Texas Civil Statutes), that must be similar to the procedures used
204	204	for the assessment, investigation, and disposition of a report of
205	205	abuse, neglect, or exploitation received by the department under
206	206	this chapter, other than a report received under Subchapter F.
207	207	(b) The procedures adopted under this section must require:
208	208	(1) a risk assessment similar to the assessment
209	209	required under Section 48.004;
210	210	(2) investigations similar to the investigations
211	211	required under Subchapter D, including requirements that the
212	212	department:
213	213	(A) take action on a report within the time frame
214	214	and in the manner provided by Section 48.151;
215	215	(B) perform an interview with the elderly person
216	216	similar to the interview required by Section 48.152;
217	217	(C) if appropriate, implement a system to
218	218	investigate complex cases similar to the system implemented under
219	219	Section 48.1521;
220	220	(D) report criminal conduct to appropriate law
221	221	enforcement agencies similar to the reports under Section 48.1522;
222	222	and
223	223	(E) review certain cases involving multiple
224	224	reports under Section 48.051 and this subchapter similar to the
225	225	review performed under Section 48.1523; and
226	226	(3) a determination of services similar to the
227	227	determination required by Section 48.202.
228	228	Sec. 48.074. AUTHORITY OF DEPARTMENT OR OTHER AGENCY. The
229	229	department or another appropriate state agency has the authority to
230	230	act on or with respect to an allegation of financial abuse of an
231	231	elderly person under this subchapter to the same extent the
232	232	department or other agency has the authority to act on or with
233	233	respect to an allegation of abuse, neglect, or exploitation under
234	234	Subchapter B.
235	235	Sec. 48.075. ACCESS TO INVESTIGATION. (a) To implement an
236	236	investigation of reported financial abuse of an elderly person, the
237	237	probate court, as defined by Section 22.007, Estates Code, may
238	238	authorize entry into the place of residence of an elderly person.
239	239	(b) A peace officer shall accompany and assist the person
240	240	making a court-ordered entry under this section if the court
241	241	determines that action is necessary.
242	242	Sec. 48.076. INTERFERENCE WITH INVESTIGATION OR SERVICES
243	243	PROHIBITED. (a) Notwithstanding Section 1151.001, Estates Code, a
244	244	person, including a guardian, may not interfere with:
245	245	(1) an investigation by the department or by another
246	246	protective services agency of suspected financial abuse of an
247	247	elderly person; or
248	248	(2) the provision of protective services to an elderly
249	249	person.
250	250	(b) The department or another protective services agency
251	251	may petition the appropriate court to enjoin any interference with:
252	252	(1) an investigation of suspected financial abuse of
253	253	an elderly person under this subchapter; or
254	254	(2) the provision of protective services, such as
255	255	removing an elderly person to safer surroundings or safeguarding
256	256	the elderly person's resources from financial abuse.
257	257	Sec. 48.077. MEMORANDUM OF UNDERSTANDING. The commission,
258	258	the Securities Commissioner, and the department shall enter into a
259	259	memorandum of understanding regarding the reporting and
260	260	investigation of suspected financial abuse of an elderly person
261	261	under this subchapter.
262	262	Sec. 48.078. CONFIDENTIALITY. (a) All files, reports,
263	263	records, communications, and working papers used or developed by
264	264	the department or other state agency in an investigation made under
265	265	this subchapter or in providing services as a result of an
266	266	investigation are confidential and not subject to disclosure under
267	267	Chapter 552, Government Code.
268	268	(b) The department or investigating state agency may
269	269	establish procedures to exchange with another state agency or
270	270	governmental entity information that is necessary for the
271	271	department, state agency, or governmental entity to properly
272	272	execute its respective duties and responsibilities to provide
273	273	services to elderly persons under this chapter or other law. An
274	274	exchange of information under this subsection does not affect
275	275	whether the information is subject to disclosure under Chapter 552,
276	276	Government Code.
277	277	SECTION 4. Subchapter C, Chapter 48, Human Resources Code,
278	278	is amended by adding Section 48.104 to read as follows:
279	279	Sec. 48.104. NONAPPLICABILITY. (a) This subchapter does
280	280	not apply to a report of financial abuse of an elderly person made
281	281	under Subchapter B-1.
282	282	(b) The confidentiality of information received or provided
283	283	by the department in connection with a report of financial abuse of
284	284	an elderly person made under Subchapter B-1 is governed by Section
285	285	48.078 and by Section 45, The Securities Act (Article 581-45,
286	286	Vernon's Texas Civil Statutes).
287	287	SECTION 5. Subchapter D, Chapter 48, Human Resources Code,
288	288	is amended by adding Section 48.1511 to read as follows:
289	289	Sec. 48.1511. NONAPPLICABILITY. This subchapter does not
290	290	apply to an investigation conducted under Subchapter B-1 unless the
291	291	executive commissioner by rule requires the application of a
292	292	provision of this subchapter.
293	293	SECTION 6. This Act takes effect September 1, 2017.