Legislature(2005 - 2006)HOUSE FINANCE 519
03/07/2006 09:00 AM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB324 | |
| HB399 | |
| HB400 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 399 | TELECONFERENCED | |
| + | HB 400 | TELECONFERENCED | |
| += | HB 485 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 324 | TELECONFERENCED | |
HOUSE BILL NO. 399
An Act establishing the office of elder fraud and
assistance; and relating to fraud involving older
Alaskans.
Co-Chair Chenault MOVED to ADOPT work draft #24-LS1517\F,
Mischel, 3/06/06, as the version of the bill before the
Committee. There being NO OBJECTION, it was adopted.
9:22:57 AM
SUE WRIGHT, STAFF, REPRESENTATIVE MIKE CHENAULT, spoke to a
desperate situation currently existing in Kenai for the
McDowell family. The situation contains an egregious act of
fraud to the elderly from a distant family relative. She
urged that member's give attention to testimony from Don
McDowell.
Ms. Wright informed members that the Office of Public
Advocacy director, Josh Fink, rose to the occasion and
offered assistance to the family.
9:25:32 AM
LALANYA SNYDER, STAFF, REPRESENTATIVE MIKE CHENAULT,
addressed an article included in the member's packets, which
sheds light on the growing crisis of elder financial fraud.
Ms. Snyder explained that financial abuse takes many forms,
including credit card fraud, real estate scams, identity
theft and burglary. Reports of elder financial exploitation
are on the rise. Forty percent of all reported elder abuse
cases involve financial exploitation, yet only a small
number are reported. A study conducted by The National
Center on Elder Abuse (NCEA) found that for every reported
case of elder abuse, another five cases went unchecked.
Ms. Snyder stated that effective State responses to
financial exploitation require collaboration by a range of
State and local agencies, including law enforcement, adult
protective services, victim service agencies and private
partners. Coordination remains a major challenge. Lack of
interagency coordination means that victims remain hidden.
HB 399 helps to ensure the necessary coordination between
agencies to address the problem. Establishing an Office of
Elder Fraud and Assistance would provide elderly Alaskans
the appropriate protection they deserve.
9:25:45 AM
JOSH FINK, DIRECTOR, OFFICE OF PUBLIC ADVOCACY (OPA),
DEPARTMENT OF AMINISTRATION, applauded the sponsor for
addressing the situation endangering elder Alaskans. There
is currently no agency authorized to actively pursue civil
remedies on behave of the exploited person. The lead agency
processing and investigating the reports of those crimes is
Adult Protective Services; they do not have the statutory
authority to sue on behalf of any individual. They can stop
the exploitation by filing a petition with the court. They
have no ability to recoup losses.
According to the director of Adult Protective Services, in
fiscal year 2005, there were 500 cases of financial abuse.
Each year, there is a significant increase in the number of
cases; of those cases, approximately 90% have been verified.
When Adult Protection Services gets a case, they attempt to
"shop" it around to the other agencies such as Alaska Legal
Services or anyone who will take it. The legislation would
empower the Office of Public Advocacy to provide that
service for anyone over 60 years old. It would provide
pursuit for those not otherwise able to bring a complaint
without assistance and the legislation would be defined in
regulation. The legislation will require OPA to work with
local, state, national law enforcement and social service
agencies to determine cooperative agreements.
Mr. Fink stated that the legislation provides recouping of
costs if it does not create a financial hardship for those
represented. He did not think they would collect fees.
These cases are complex and are becoming a growing problem
within Alaska.
Mr. Fink pointed out the conservative fiscal note. He had
attempted to determine the national standard, but came to
find none. It appears one attorney could handle about 65
cases a year; the note requests three.
Co-Chair Meyer voiced concern with the note. He requested
that Co-Chair Chenault, Representative Hawker and Mr. Fink
work to address associated costs.
9:34:32 AM
Representative Holm asked if there could be unintended
consequences resulting from collecting fees from the
perpetrator that extorted the client.
Representative Holm pointed out no note from the Public
Defender's Agency; he asked if it would be forthcoming.
9:36:04 AM
Mr. Fink did not anticipate a note from that Office. Most
cases are generally not prosecuted, as it does not create a
new crime. It is not intended to ask fees from anyone
experiencing financial hardship. He imagined that generally
no fees would be paid.
9:36:21 AM
Representative Kelly echoed concern with the fiscal note.
He worried about adding a category, which indicates anyone
over 60 as vulnerable and unable to think for themselves.
He disagreed with that assessment. He voiced concern with
the switch from civil to criminal penalties and that passage
of the bill would cause unintended consequences.
9:41:02 AM
Mr. Fink shared those concerns. He did not want to set up
an office and find it overwhelmed. Adult Protective
Services currently has 5 investigators. There are sidebars
in place, which require that a person be over 60 years old.
He hoped to reach an agreement making Adult Protective
Services the "gatekeeper" for referrals.
Representative Kelly reiterated his concerns, warning that
passage of the bill could become a "nightmare".
9:43:02 AM
Representative Hawker commented on further defining the data
point of the "60 years of age or older". He asked how that
number was determined. That language could carve out a new
social service agency.
Mr. Fink acknowledged it was a public policy question
regarding where to cut off. Adult Protective Services
recommended using language rather than 60, a "vulnerable
adult", as defined in statute.
9:45:27 AM
Ms. Snyder interjected that many other statutes use "60
years" in regulation. "Vulnerable adult" as discussed,
could begin at 18 years. She offered to double check that
information and come back with age specific numbers. Mr.
Fink pointed out that Adult Protective Services had 500
reports of exploitation and of those 65% were over 60 years
old.
Representative Hawker asked what made a person excluded less
vulnerable. Mr. Fink responded it was an added sidebar to
limit the scope of services.
9:46:57 AM
DAN MCDOWELL, (TESTIFIED VIA TELECONFERENCE), MAT-SU,
thanked Co-Chair Chenault's office for all their work on the
bill, noting he is a lifetime Alaskan.
Mr. McDowell explained that his father has had Alzheimer's
for seven years. A distant relative from Colorado came to
Alaska to assist the family. That caregiver had his mother
sign quick claim deeds to the family trust and over a period
of several months, he assumed all the family's property and
money. The relative handed his parents an eviction notice
and tied up all their money. He has now leased their
property and taken all the money the senior couple had
saved.
He stated that HB 399 addresses concerns for all seniors in
Alaska. Mr. McDowell urged that the bill pass to help
protect each of us. The Federal Bureau of Investigation
(FBI) assumed that his parent's case was a civil case. Mr.
McDowell agreed that it is, but he thought it should be
tried as a criminal case of fraud. He stressed the number
of the many vulnerable Alaskans and pleaded that the
legislation pass from Committee.
9:53:27 AM
Representative Hawker asked about creating of an Office of
Elder Fraud. He asked if the intent was to go after someone
that legally committed a criminal activity. Mr. Fink
replied that was an intended subset and that the fraud is
criminal. He agreed one should have to prove elements
beyond a reasonable doubt.
9:55:27 AM
Representative Hawker noted it could be both civil and
criminal. He asked if the criminal level had been
contemplated in the fiscal note. He wondered if there were
existing resources to pursue the issue. Mr. Fink hoped that
if an office was established, there would be an agreement
with the Department of Law for making referrals for
prosecution. The problem is that it is not presently being
pursued by the law enforcement agencies.
Representative Hawker referenced Section 2, Page 3, asking
about cost recovery. Mr. Fink pointed out the amendment,
indicating three court rules, providing for recovery of
Court fees. The Legislature should not tinker with those
court rules to craft something to recoup actual costs.
Representative Holm asked if the McDowell case rose to a
criminal level. Mr. Fink thought it should be classified
criminal fraud.
Representative Holm voiced concern. He advised that
"individuals" remedy civil cases. If it were a case
affecting all society, it would be criminal. He did not
think the State should make policy decisions regarding
individual's dealings with one another. He maintained that
having State government involved was bad policy.
10:00:47 AM
Mr. Fink assumed that Adult Protective Services would make
that determination. He referenced the McDowell case, in
which the wife had never been involved in the family's
finances and then was signing all their financial documents.
He believed it was different than "buyer's remorse".
Representative Holm countered that it would raise criminal
fraud.
Mr. Fink stated that fraud is difficult to prove criminally;
these are rare analogies. If there were an analogy with a
different set of evidence and proof, it would not mean it
could not be pursued civilly.
Representative Kelly asked how many states have the proposed
law. Mr. Fink responded that he had not contacted all the
states; however, in Cook County, Illinois, there are 100
attorneys in their fraud unit. There was no state exactly
the same as proposed in the legislation; it mostly resembles
mixtures and/or combinations of the proposed.
10:03:37 AM
Representative Kelly thought it would be better legislation
if the judgment took a one third of the recovery. Mr. Fink
agreed that could be a legitimate way to go.
ED SNIFFEN, JR., (TESTIFIED VIA TELECONFERENCE), ASSISTANT
ATTORNEY GENERAL, DEPARTMENT OF LAW, ANCHORAGE, spoke to
some possible unintended consequences. The Department of
Law does have the jurisdiction to pursue cases of fraud
against the elderly and do so often. Those resources are
limited and it is impossible to act as everyone's individual
lawyer. The Department focuses their efforts on fraud that
impacts the greater public interest.
The statutes contain a provision, which prevents exercising
jurisdiction over cases that are regulated by another
agency. Mr. Sniffen clarified that if the legislation moves
forward, there would need to be a provision in the bill that
does not exempt their office from prosecuting fraud. He
recommended there be a provision that provides that the
Office of OPA proceed with the investigation.
Mr. Sniffen addressed the line drawn at 60 years of age and
mentioned equal protection concerns with that language. Age
discrimination is forbidden by the constitution. He
recommended using "vulnerable" adults and offered to answer
questions of the Committee.
Co-Chair Chenault asked what would stop the Department of
Law from making charges in the McDowell case. Mr. Sniffen
responded that resources are a major consideration to the
Department in pursuing that case. He understood that it
involved exploitation to an individual with Alzheimers. If
it something unique and particular to an individual, the
Department would most likely not be too interested. The
Office consists of three attorneys and is in charge of all
consumer protection in the State of Alaska. The office is
restricted to focusing efforts on broader scope issues.
Co-Chair Chenault voiced concern that the Department does
not look at all cases. He acknowledged funding concerns.
He noted that the McDowell case affects their entire life.
He realized that it is the job of a private attorney;
however, most attorneys would not be willing to take the
case without proof of finances.
10:11:37 AM
Mr. Sniffen agreed; he wished that their Division had the
resources necessary to pursue more cases on behalf of
individual consumers. He reiterated that it is a funding
issue. He acknowledged that should not detract from the
seriousness of the issue.
10:12:58 AM
Co-Chair Meyer noted that Representative Kelly would join
the group of Representative Hawker, Co-Chair Chenault and
Mr. Fink to discuss the legislation.
Co-Chair Meyer MOVED to ADOPT Conceptual Amendment #1.
(Copy on File). Vice Chair Stoltze OBJECTED.
SUZANNE CUNNINGHAM, STAFF, REPRESENTATIVE KEVIN MEYER, spoke
to the amendment. She corrected wording of the amendment
indicating that it had been written to the \F version, so
the line indications would change to Lines 5-6 from 4-5.
Co-Chair Meyer MOVED the proposed change. There being NO
OBJECTION to that change, it was adopted and Amendment #1
was amended.
Ms. Cunningham discussed the amendment, Subsection (B)
regarding theft and related offenses. In reviewing statute,
it was noted that the reference was too broad. Speaking
with Alaska Legal Services, it was determined to be limited
to those crimes that specifically address potential for
fraud or deceit.
10:15:48 AM
Representative Kerttula understood the need to bring "it
down"; she asked what offenses had been dropped. Ms.
Cunningham stated that criminal simulation and defrauding
creditors had not been listed and should have been.
Co-Chair Meyer recommended holding the amendments and have
the sponsor consider them when discussing the fiscal costs.
Co-Chair Meyer WITHDRW his MOTION to MOVE amended Amendment
#1. There being NO OBJECTION, the amendment was WITHDRAWN.
Representative Kelly inquired if providing half the
requested fiscal cost, could some cases be addressed. He
mentioned states using a "criminal arm" and asked if the
bill could address that.
10:19:37 AM
Representative Weyhrauch observed on Page 4, Line 8,
"significant" should be deleted.
Co-Chair Meyer stated that HB 399 would be HELD in Committee
for further consideration.
10:20:47 AM
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