SENATE BILL NO. 86 "An Act relating to the protection of property of persons under disability and minors; relating to the crime of violating a protective order concerning certain vulnerable persons; relating to aggravating factors at sentencing for offenses concerning a victim 65 years or older; relating to the protection of vulnerable adults; amending Rule 12(h), Alaska Rules of Criminal Procedure; amending Rule 45(a), Alaska Rules of Criminal Procedure; amending Rule 65, Alaska Rules of Civil Procedure; amending Rule 17, Alaska Rules of Probate Procedure; amending Rule 9, Alaska Rules of Administration; and providing for an effective date." 9:54:35 AM KIMBERLI POPPE-SMART, DEPUTY COMMISSIONER, MEDICAID AND HEALTHCARE POLICY, DEPARTMENT OF HEALTH AND SOCIAL SERVICES, testified in support and introduced the bill and stated that the legislation was a collaborative, cross-agency effort. 9:57:38 AM JOANNE GIBBENS, DEPUTY DIRECTOR, SENIOR DISABILITY SERVICES, DEPARTMENT OF HEALTH AND SOCIAL SERVICES, testified in support of SB 86 and highlighted important elements of the legislation, which covered existing gaps in the services provided to vulnerable adults. She stated that the most important element of the bill created a process for appointing a temporary conservator to someone at risk of eminent harm to their financial status or healthcare decision making. The legislation allowed the court to impose emergency conservatorships which could be removed or renewed as needed. She furthered that the bill assisted in protecting financial assets, managing financial affairs, and preventing eminent waste or fraudulent dissipation of assets. She declared that the second most important element of the bill created a process for the imposition of financial protective orders. The legislation imparted the ability to apply for a 20-day ex parte protective order that gave courts the tools to stop or prevent financial exploitation. She noted that these tools were not currently available to Adult Protective Services or others who assist with vulnerable adults. She added that another notable element of the legislation was that it mandated that anyone working at a healthcare or educational facility must report suspected abuse of vulnerable adults. She expounded that currently, only administrators were mandated reporters. Under SB 86, the mandate would be expanded to apply to educational facilities. The legislation also defined "undue influence" as a reportable harm. Undue influence meant that a person of trust was abusing or misusing their power and applying undue influence to a vulnerable adult in order to gain control over their healthcare decision making, assets, or finances. She felt that the addition of undue influence and mandated reporters would give the state earlier detection and intervention for individuals who were vulnerable to loss of their property or decision making. The bill enabled earlier protective orders, facilitated more thorough and successful investigations, provided protection of assets during an investigation, and enhanced criminal penalties when the victim was elderly. She concluded that in broad summary, the bill would provide Alaska the additional tools necessary to combat the growing problem of financial abuse among elderly and disabled populations. 10:01:16 AM Ms. Gibbens explained the financial exploitation issues among vulnerable adults. She indicated that Adult Protective Services had experienced a slow increase in the number of calls regarding the financial exploitation of vulnerable adults. She stated that the majority of the calls were regarding adults over 60-years- old, but some calls were concerning developmentally disabled or traumatic brain injury victims. She remarked that in FY 10 Senior & Disability Services (SDS) substantiated 100 cases of financial exploitation; that number rose to 125 in FY 11 and during the current fiscal year, SDS had already substantiated 85 cases. She indicated there was a trend developing in the rising number of cases of financial exploitation and that most instances of exploitation involved family members taking advantage of other family members. In many abuse cases, the offender had Power of Attorney (POA) over the victim. She discussed the ways inner-family financial abuse occurs. She continued that under SB 86, the undue influence statute, the ability to impose financial protective orders, and the ability appoint temporary conservators enabled the state to respond faster and more effectively to abuse. She related the reasons that caused people to give up their POA and explained the dynamics between the offender and the victim. 10:06:57 AM Co-Chair Hoffman wondered if any of the 210 cases the prior year and a half had involved the identity theft of vulnerable adults. Ms. Barrans indicated that she did not have the exact numbers with her, but confirmed that there were cases involving identity theft. She agreed to provide the exact numbers at a later date. Co-Chair Hoffman inquired how the legislation addressed identify theft. Ms. Barrans deferred the question to one of the attorneys, but added that she did not believe that SB 86 mentioned identity theft specifically. Senator Egan observed that when vulnerable adults relinquished their POA, they may not have had the reasoning capacity necessary to recognize that someone was taking advantage of them. He wondered how cases where the victim was unaware of being taken advantage of were dealt with. Ms. Gibbens explained that there was a process through which an evaluation was done to determine the victim's cognitive ability and added that when the victim was unaware of being abused, a phone call was needed for SDS to act Senator Egan asked if SB 86 required employees of an assisted living facility to report the abuse of seniors. Ms. Gibbens responded that under the bill, employees of an assisted living facility were mandated to report any possible abuse. 10:09:58 AM Senator Thomas noted that SB 86 required temporary conservators to fill out an annual reporting form that detailed how funds were spent. He furthered that the annual reporting increased accountability and he thought it made fraud unlikely. He wondered what documents a conservator signed regarding their responsibilities and if abuse was substantiated, what penalties were enforced. Ms. Gibbens replied that she was not familiar with the conservatorship process, but indicated that Kelly Henriksen was present to discuss the specifics of the bill. 10:11:24 AM Co-Chair Stedman addressed the updated fiscal notes attached to SB 86. He introduced a zero fiscal note from the Department of Health and Social Services (DHSS), a zero fiscal note the Department of Administration (DOA), a zero fiscal note from the Department of Law (DOL), a zero fiscal note from the Department of Public Safety (DPS), Alaska State Troopers Detachment, a zero fiscal note from the Department of Corrections (DOC), and a zero fiscal note from the Alaska Court System (COURT). He discussed a fiscal impact note from DPS, Statewide Support, in the amount of $48,000 in General Funds for the purposes of developing new protective order forms, updating the Alaska Public Safety Information Network (APSIN), and training. 10:13:37 AM AT EASE 10:16:23 AM RECONVENED 10:19:20 AM Co-Chair Hoffman noted that there were no provisions in SB 86 that dealt with how the state interfaced with tribal courts regarding the protection of vulnerable adults. He wondered how Ms. Russo saw the relationship between the two courts and queried if she believed, as he did, that it needed to be specifically addressed in the legislation. Ms. Russo responded that it was her experience that tribal courts had not actively taken a role in conservatorship proceedings. She furthered that the reason it was not included in the bill was because the tribal courts had not participated in the past. Co-Chair Hoffman stressed that the relationship between Alaska and tribal courts should be spelled out before it became a problem. Senator Thomas reiterated his prior question regarding the accountability of conservators and expanded it to encompass children in the foster care system. Ms. Russo replied that SB 86 did not specifically address the issue of children in the foster care system. She related that not all fiduciaries were required to report finances, but that only appointed guardians and conservators were subject to reporting responsibilities. She indicated that the gap in accountability was the reason SB 86 had addressed the POA issue. Appointed guardians and conservators were required to undergo training, an hour of education, and to sign a letter of acceptance that stated they understood the reporting requirements. Guardians and conservators could be held liable if it had been determined that they had acted outside their fiduciary responsibilities. Senator Thomas asked if there was a statute that gave consideration to other persons that might have fiduciary responsibilities over vulnerable individuals, particularly regarding the foster care system. Ms. Russo deferred to Mr. Sterling and noted that he would be better able to answer the question. She concluded that SB 86 focused on vulnerable adults and not on the foster care system. 10:25:02 AM SCOTT STERLING, SUPERVISING ATTORNEY, OFFICE OF ELDER FRAUD AND ASSISTANCE, OFFICE OF PUBLIC ADVOCACY, DEPARTMENT OF ADMINISTRATION (via teleconference), began a sectional analysis of SB 86(copy on file). He reviewed the following sections: • Section 3 makes the knowing violation or attempted violation of a financial protective order (introduced in section 10 of this legislation to protect vulnerable adults and elders) a crime. • Section 4 amends AS 11.56.740(c), which defines "protective orders," by including financial protective orders issued under AS 13 .26.207 -13 .26.209 to that definition. This change brings financial protective orders within the class of protective orders subject to sanction under the criminal code. • Section 5 amends AS 12.55.155(c) by adding a new paragraph (35) which makes the fact that a defendant knowingly directed criminal conduct at a person 65 years of age or older an aggravating factor at sentencing. • Section 6 amends AS 13.26.165(1) by substantively adding several new paragraphs and changes or additions in definitions to enhance protection of vulnerable persons in conservatorship proceedings as follows: • amends AS 13.26.165 by deleting the words "make another" and inserting the words "issue another" regarding the authority of the court to issue a protection order for a protected person in conservatorship proceedings; • creates new paragraph (A) to authorize the court to issue orders protecting a minor with money or property that needs protection or who otherwise needs protection and substitutes the word "that" for the word "which" in the authorizing language; • creates a new paragraph (B) specifying that the authority of the court to issue protective orders extends to minors with business affairs that may be in jeopardy and substitutes the word "that" for the word "which" in the authorizing language; • creates a new paragraph (C) ensuring that protection extends to any need to protect a minor's funds or obtain funds for a minor and deletes the unnecessary use of the word "that" twice in the authorizing language; • Section 7 amends AS 13.16.lS0(a) by adding "a person's attorney or other legal representative." to the list of persons who may petition for a conservatorship and further adds "or caregiver, the Department of Health and Social Services" to that list. This change is necessary to broaden the list of specific persons authorized to petition for a conservatorship in aid of a vulnerable adult and specifically to ensure that the Department of Health and Social Services is authorized to do so when necessary. 10:28:10 AM Mr. Sterling summarized the remaining sections and explained that they added financial protective orders, which would operate similarly to domestic violence protective orders. The legislation also added ex parte relief that would enable a vulnerable adult or an intermediary, without a lawyer, to go to any court and apply for protection to stop ongoing abuse. He explained that it had become easy to steal someone's money and identity through technology, and when people became aware of the problem, they needed help immediately. He furthered that the rationale behind the ex parte relief provision was to enable victims to get immediate help and added that other sections allowed for temporary conservators. Currently, the statutes allowed for temporary guardians but not conservators. He related that it was his experience that courts were reluctant to grant conservatorships because they were not expressly permitted by statute. The legislation authorized by law the appointment of temporary conservators. He stated that the clarification would enhance the ability of victims and DHSS to obtain immediate relief for victims of financial abuse. He explained that other portions of bill, which were largely definitional, expanded or added the definition of things such as fraud, while other sections added "undue influence" into statue. Under the undue influence statute, there were specific grounds to assert that a fiduciary was abusing their responsibility. 10:30:56 AM Mr. Sterling responded to Senator Thomas's earlier question, and indicated that the only fiduciaries in Alaska that were required to be vetted by a court were guardians and conservators. He stated that trusts were a private matter and furthered that although there was a section in Title 13 that dealt with trusts, there were no requirements that a trustee be vetted in any way. He described Alaska's POA statute, found in Section 13, as "a maximum utility, minimal regulation, and minimal liability statute." There were currently no requirements for serving as POA and there were no standards, licensing, or liability provisions to deal with abuse. He explained that "maximum utility" resulted in a greater risk of abuse of fiduciary responsibility from POA. In response to an earlier question from Co-Chair Hoffman, Mr. Sterling indicated that he was not looking at how the tribal courts interfaced with state courts when he drafted SB 86. He felt that taking a look at this aspect was a "meritorious" idea and furthered that he would be "happy" to take a look at it. 10:33:19 AM KELLY HENRIKSEN, ASSISTANT ATTORNEY GENERAL, HUMAN SERVICES, DEPARTMENT OF LAW, introduced herself. She stated that half of SB 86 dealt with Adult Protective Services, which was the office she represented. She indicated that Mr. Sterling had presented the part of bill that dealt with conservatorships and financial protective orders, which is found in Title 13. The part that she had drafted, found in Title 47, dealt with Adult Protective Services. The highlights of the Adult Protective Services Sections, which began at Section 16 of the bill, added the concept of "undue influence" to the entire Adult Protective Services code. The legislation updated the Adult Protective Services code to meet the practical needs of the time. She stated that because it permeated what Adult Protective Services did, the term "undue influence" was added anyplace in the statutes where it specified what kinds of activities someone might make a report of harm about, such as abuse, neglect, or self-neglect. She related that most of the Sections in the Adult Protective Services part of the bill simply added the term "undue influence", but that there were no other substantive changes in those Sections. She remarked that another important thing the Adult Protective Services portion of SB 86 did was that it updated and added definitions in the statutes to more accurately reflect reality. Ms. Henriksen offered that the final element worthy of note from the portion of SB 86 that she had drafted was that it expanded the list of what services Adult Protective Services was able to provide, short of a guardian or conservator being appointed. She cited examples of these services as follows: staying a financial transaction at a bank, assistance with a rental application, providing food, and providing other care services an adult needed. She indicated that instead of doing a guardian's duties, Adult Protective Services had discovered a need to have a clearer definition of what they could do as an intermediary. She concluded by stating that other than the three elements she had pointed out, there was not anything significant in the Alaska Protective Services portion of the sectional. Senator Olsen stated that he assumed the victimization of elders represented the minority of cases of financial abuse. Ms. Henriksen responded that she was unsure if that statement was correct, but indicated that Ms. Gibbens might be able to respond to the question. Senator Olsen queried if there was strain being placed on individuals who were complying with the law and were legitimately trying to obtain guardianship or conservatorship. He expressed concern that responsible children could have a difficult time obtaining guardianship or conservatorship from parents who were not being abused. Ms. Gibbens replied that she did not believe that to be true and furthered that the process followed to gain guardianship or conservatorship was the same whether or not an individual was attempting to take advantage of an elder. 10:37:31 AM Senator Thomas referenced a 25 percent increase in the abuse rate on the system over the last year and asked if anything in SB 86 specifically addressed the issue. Ms. Henriksen specified that the ability to impose financial protective orders and temporary conservators were two additions that addressed the increase in abuse. Senator Thomas queried if Ms. Henriksen thought there should be a more thorough vetting process, such as a background check, when a guardian or conservator was appointed. Ms. Henriksen responded that if Adult Protective Services received a report of harm, their investigation was "very thorough". She mentioned that during an investigation informal background checks were performed, so that when the case was heard any issue about a potential guardian or conservator would be raised in open court. She concluded that in her experience, Adult Protective Services did not take chances when allegations of abuse had been raised. She furthered that Adult Protective Services gathered as much information as possible, so that the judge could make the decision on who was appropriate. Ms. Henriksen revealed that the transfer of POA was a private matter that did not require any state involvement or time before a judge and explained that because of this, the state was unaware and unable to affect that process. She continued that Adult Protective Services could only get involved when they received a report of harm, but that once they were involved, the process was thorough. Senate Bill 86 was HEARD and HELD in Committee for further consideration.