Bill Text: TX HB3224 | 2017-2018 | 85th Legislature | Introduced
Bill Title: Relating to requiring dealers and investment advisers to report suspected financial abuse of elderly persons; providing a civil penalty; creating a criminal offense.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2017-04-11 - Left pending in committee [HB3224 Detail]
Download: Texas-2017-HB3224-Introduced.html
85R8745 EES-D | ||
By: Perez | H.B. No. 3224 |
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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. |