85R8745 EES-D
By: Perez H.B. No. 3224
A BILL TO BE ENTITLED
AN ACT
relating to requiring dealers and investment advisers to report
suspected financial abuse of elderly persons; providing a civil
penalty; creating a criminal offense.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. The Securities Act (Article 581-1 et seq.,
Vernon's Texas Civil Statutes) is amended by adding Section 45 to
read as follows:
Sec. 45. REPORTING OF FINANCIAL ABUSE OF ELDERLY PERSONS.
A. In this section:
(1) "Adult protective services division" means the
adult protective services division of the Department of Family and
Protective Services.
(2) "Elderly person" has the meaning assigned by
Section 48.002, Human Resources Code.
(3) "Financial abuse" means the wrongful or negligent
taking, appropriation, obtaining, retention, or use of, or
assisting in the wrongful or negligent taking, appropriation,
obtaining, retention, or use of, money or other property of another
person by any means, including by exerting undue influence. The
term includes financial exploitation.
(4) "Financial exploitation" means the wrongful or
negligent taking, appropriation, obtaining, retention, or use of
money or other property of another person by a person who has a
relationship of confidence or trust with the other person.
Financial exploitation may involve coercion, manipulation,
threats, intimidation, misrepresentation, or the exerting of undue
influence. The term includes:
(A) the breach of a fiduciary relationship,
including the misuse of a durable power of attorney or the abuse of
guardianship powers, that results in the unauthorized
appropriation, sale, or transfer of another person's property;
(B) the unauthorized taking of personal assets;
(C) the misappropriation, misuse, or
unauthorized transfer of another person's money from a personal or
a joint account; and
(D) the negligent or intentional failure to
effectively use another person's income and assets for the
necessities required for the person's support and maintenance.
B. For purposes of Subsection A of this section, a person
has a relationship of confidence or trust with another person if the
person:
(1) is a parent, spouse, adult child, or other
relative by blood or marriage of the other person;
(2) is a joint tenant or tenant-in-common with the
other person;
(3) has a legal or fiduciary relationship with the
other person;
(4) is a financial planner or investment professional
who provides services to the other person; or
(5) is a paid or unpaid caregiver of the other person.
C. Notwithstanding any other law, if an agent or investment
adviser representative has a good faith belief that financial abuse
of an elderly person has occurred or is occurring, the agent or
investment adviser representative shall immediately notify the
dealer or investment adviser, as appropriate, for whom the agent or
investment adviser representative is providing services.
D. On receiving the notification made under Subsection C of
this section or if a dealer or investment adviser has a good faith
belief that financial abuse of an elderly person has occurred or is
occurring, the dealer or investment adviser, as appropriate, shall:
(1) subject to Subchapter B-1, Chapter 48, Human
Resources Code, make a report notifying the adult protective
services division of the suspected financial abuse; and
(2) notify the appropriate local law enforcement
agency with jurisdiction over the municipality or county in which
the elderly person resides of the suspected financial abuse for
purposes of investigating and determining whether an offense under
Section 32.53, Penal Code, or other law has occurred.
E. The report and notification required by Subsection D of
this section must be made:
(1) by telephone or electronic means, not later than
24 hours after the dealer or investment adviser receives
notification of suspected financial abuse or believes in good faith
that suspected financial abuse occurred or is occurring; and
(2) in writing, not later than the third business day
after the date the dealer or investment adviser receives
notification of suspected financial abuse or believes in good faith
that suspected financial abuse occurred or is occurring.
F. For purposes of Subsection C of this section, a person's
good faith belief must be acquired in connection with the provision
of services by the person to or on behalf of the elderly person and
must be based on:
(1) the person's observation or knowledge of an
incident of suspected financial abuse, if the person has direct
contact with the elderly person; or
(2) the presence of information indicating potential
financial abuse during a review or approval process performed by
the person in connection with the provision of services, if the
person does not have direct contact with the elderly person but
reviews or approves the elderly person's transactions, documents,
or records.
G. Nothing in this section shall be construed to require a
dealer or investment adviser to investigate an allegation of
financial abuse made by an elderly person or other person.
H. Except as provided by Subsection I of this section, the
following information is confidential and is not subject to
disclosure to the public, except under court order:
(1) the information contained in a report or
notification made under Subsection D of this section;
(2) the identity of any informing agent or investment
adviser representative under Subsection C of this section or the
name of the dealer or investment adviser making the report or
notification under Subsection D of this section; and
(3) information provided by or submitted to a dealer
or investment adviser in connection with an investigation arising
out of a report or notification made under Subsection D of this
section.
I. Information that is confidential under Subsection H of
this section may be disclosed only:
(1) to the adult protective services division or
another state agency, a law enforcement agency, or the attorney
general, in connection with the reporting or notification of or an
investigation of suspected financial abuse of the elderly person to
whom the information pertains;
(2) to, or as authorized by, the elderly person or the
guardian of the elderly person, unless the dealer or investment
adviser suspects the guardian of financial abuse of the elderly
person; or
(3) as part of a civil or criminal action related to
the suspected financial abuse of the elderly person.
J. A person commits an offense if the person discloses
confidential information in violation of this section. An offense
under this subsection is a Class C misdemeanor.
K. A dealer or investment adviser that, or an agent or
investment adviser representative who, makes a report or
notification in good faith under Subsection C or D of this section
is immune from any criminal or civil liability arising from:
(1) the report or notification; or
(2) participation in any judicial proceeding arising
from the report or notification.
L. A dealer or investment adviser that fails to make a
report or notification in violation of this section is liable to
this state for a civil penalty in an amount not to exceed $25,000,
unless a court finds the violation to be wilful, in which case the
amount of the civil penalty may not exceed $100,000.
M. The attorney general may bring an action on behalf of
this state to recover a civil penalty under Subsection L of this
section.
N. Subject to Section 48.072, Human Resources Code, the
Board and the executive commissioner of the Health and Human
Services Commission, after consulting with the Securities
Commissioner and the Department of Family and Protective Services,
shall jointly adopt rules necessary to implement this section,
including rules that require each dealer or investment adviser to
implement a training program to:
(1) assist the agents or investment adviser
representatives, as appropriate, in recognizing signs of potential
financial abuse of an elderly person; and
(2) inform the agents or investment adviser
representatives, as appropriate, about the reporting and
notification requirements of this section.
SECTION 2. Subchapter A, Chapter 48, Human Resources Code,
is amended by adding Section 48.008 to read as follows:
Sec. 48.008. CONSOLIDATION OF CERTAIN REPORTS. If
cost-effective and feasible, the executive commissioner by rule may
consolidate the form and procedures used to submit a report under
Sections 48.051 and 48.072.
SECTION 3. Chapter 48, Human Resources Code, is amended by
adding Subchapter B-1 to read as follows:
SUBCHAPTER B-1. FINANCIAL ABUSE OF ELDERLY PERSONS
Sec. 48.071. DEFINITIONS. In this subchapter:
(1) "Dealer" and "investment adviser" have the
meanings assigned by Section 4, The Securities Act (Article 581-4,
Vernon's Texas Civil Statutes).
(2) "Financial abuse" has the meaning assigned by
Section 45, The Securities Act (Article 581-45, Vernon's Texas
Civil Statutes).
(3) "Securities board" means the State Securities
Board.
Sec. 48.072. CERTAIN REPORTS OF SUSPECTED FINANCIAL ABUSE.
(a) The executive commissioner, after consultation with the
securities board, by rule shall prescribe the form and content of
the report required to be made by a dealer or investment adviser
under Section 45, The Securities Act (Article 581-45, Vernon's
Texas Civil Statutes). A report made by a dealer or investment
adviser under Section 45, The Securities Act (Article 581-45,
Vernon's Texas Civil Statutes), constitutes a report of suspected
financial abuse of an elderly person for purposes of this
subchapter.
(b) In adopting rules under this section, the executive
commissioner shall ensure that a report of suspected financial
abuse of an elderly person described by Subsection (a) includes to
the extent possible the same information required to be included in
a report under Section 48.051(d).
(c) A dealer or investment adviser that makes a report to
the department of suspected financial abuse of an elderly person
under Section 45, The Securities Act (Article 581-45, Vernon's
Texas Civil Statutes), in accordance with this section is not
required to make an additional report of suspected abuse, neglect,
or exploitation under Section 48.051 for the same conduct
constituting the financial abuse reported under this section.
Sec. 48.073. ASSESSMENT, INVESTIGATION, AND DISPOSITION OF
REPORTS. (a) The executive commissioner by rule shall adopt
procedures for the assessment, investigation, and disposition of a
report of suspected financial abuse of an elderly person received
under Section 45, The Securities Act (Article 581-45, Vernon's
Texas Civil Statutes), that must be similar to the procedures used
for the assessment, investigation, and disposition of a report of
abuse, neglect, or exploitation received by the department under
this chapter, other than a report received under Subchapter F.
(b) The procedures adopted under this section must require:
(1) a risk assessment similar to the assessment
required under Section 48.004;
(2) investigations similar to the investigations
required under Subchapter D, including requirements that the
department:
(A) take action on a report within the time frame
and in the manner provided by Section 48.151;
(B) perform an interview with the elderly person
similar to the interview required by Section 48.152;
(C) if appropriate, implement a system to
investigate complex cases similar to the system implemented under
Section 48.1521;
(D) report criminal conduct to appropriate law
enforcement agencies similar to the reports under Section 48.1522;
and
(E) review certain cases involving multiple
reports under Section 48.051 and this subchapter similar to the
review performed under Section 48.1523; and
(3) a determination of services similar to the
determination required by Section 48.202.
Sec. 48.074. AUTHORITY OF DEPARTMENT OR OTHER AGENCY. The
department or another appropriate state agency has the authority to
act on or with respect to an allegation of financial abuse of an
elderly person under this subchapter to the same extent the
department or other agency has the authority to act on or with
respect to an allegation of abuse, neglect, or exploitation under
Subchapter B.
Sec. 48.075. ACCESS TO INVESTIGATION. (a) To implement an
investigation of reported financial abuse of an elderly person, the
probate court, as defined by Section 22.007, Estates Code, may
authorize entry into the place of residence of an elderly person.
(b) A peace officer shall accompany and assist the person
making a court-ordered entry under this section if the court
determines that action is necessary.
Sec. 48.076. INTERFERENCE WITH INVESTIGATION OR SERVICES
PROHIBITED. (a) Notwithstanding Section 1151.001, Estates Code, a
person, including a guardian, may not interfere with:
(1) an investigation by the department or by another
protective services agency of suspected financial abuse of an
elderly person; or
(2) the provision of protective services to an elderly
person.
(b) The department or another protective services agency
may petition the appropriate court to enjoin any interference with:
(1) an investigation of suspected financial abuse of
an elderly person under this subchapter; or
(2) the provision of protective services, such as
removing an elderly person to safer surroundings or safeguarding
the elderly person's resources from financial abuse.
Sec. 48.077. MEMORANDUM OF UNDERSTANDING. The commission,
the Securities Commissioner, and the department shall enter into a
memorandum of understanding regarding the reporting and
investigation of suspected financial abuse of an elderly person
under this subchapter.
Sec. 48.078. CONFIDENTIALITY. (a) All files, reports,
records, communications, and working papers used or developed by
the department or other state agency in an investigation made under
this subchapter or in providing services as a result of an
investigation are confidential and not subject to disclosure under
Chapter 552, Government Code.
(b) The department or investigating state agency may
establish procedures to exchange with another state agency or
governmental entity information that is necessary for the
department, state agency, or governmental entity to properly
execute its respective duties and responsibilities to provide
services to elderly persons under this chapter or other law. An
exchange of information under this subsection does not affect
whether the information is subject to disclosure under Chapter 552,
Government Code.
SECTION 4. Subchapter C, Chapter 48, Human Resources Code,
is amended by adding Section 48.104 to read as follows:
Sec. 48.104. NONAPPLICABILITY. (a) This subchapter does
not apply to a report of financial abuse of an elderly person made
under Subchapter B-1.
(b) The confidentiality of information received or provided
by the department in connection with a report of financial abuse of
an elderly person made under Subchapter B-1 is governed by Section
48.078 and by Section 45, The Securities Act (Article 581-45,
Vernon's Texas Civil Statutes).
SECTION 5. Subchapter D, Chapter 48, Human Resources Code,
is amended by adding Section 48.1511 to read as follows:
Sec. 48.1511. NONAPPLICABILITY. This subchapter does not
apply to an investigation conducted under Subchapter B-1 unless the
executive commissioner by rule requires the application of a
provision of this subchapter.
SECTION 6. This Act takes effect September 1, 2017.