Legislature(2011 - 2012)SENATE FINANCE 532
01/18/2012 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB104 | |
| SB86 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 104 | TELECONFERENCED | |
| + | SB 86 | TELECONFERENCED | |
| + | SB 2 | TELECONFERENCED | |
| + | SB 16 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE FINANCE COMMITTEE
January 18, 2012
9:02 a.m.
9:02:00 AM
CALL TO ORDER
Co-Chair Stedman called the Senate Finance Committee meeting to
order at 9:02 a.m.
MEMBERS PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Lesil McGuire, Vice-Chair
Senator Johnny Ellis
Senator Dennis Egan
Senator Donny Olson
Senator Joe Thomas
MEMBERS ABSENT
None
ALSO PRESENT
Diane Barrans, Executive Director, Postsecondary Education
Commission, Department of Education; Kimberli Poppe-Smart,
Deputy Commissioner, Medicaid and Healthcare Policy, Department
of Health and Social Services; Kelly Henriksen, Assistant
Attorney General, Department of Law; Jerry Burnett, Director,
Administrative Services Division, Department of Revenue; Joanne
Gibbens, Deputy Director, Senior Disability Services, Department
of Health and Social Services.
PRESENT VIA TELECONFERENCE
Robynn Wilson, Audit Supervisor, Tax Division, Department of
Revenue; Scott Sterling, Department of Elder Fraud and
Assistance; Elizabeth Russo, Supervising Attorney, Public
Guardian Section, Office of Public Advocacy; Katherine Monfreda,
Chief of Criminal Records and Identification Borough, Division
of Statewide Services, Department of Public Safety.
SUMMARY
SB 2 LICENSE PLATES: NATIONAL RIFLE ASSN.
SB 2 was SCHEDULED but not HEARD.
SB 16 SPECIAL REQUEST LICENSE PLATES
SB 16 was SCHEDULED but not HEARD.
SB 86 PROTECTION OF VULNERABLE ADULTS/MINORS
SB 86 was HEARD and HELD in Committee for further
consideration.
CSHB 104(RLS)
ALASKA PERFORMANCE SCHOLARSHIPS
CSHB 104(RLS) was HEARD and HELD in Committee for
further consideration.
CS FOR HOUSE BILL NO. 104(RLS)
"An Act renaming the Alaska performance scholarship and
relating to the scholarship and tax credits applicable to
contributions to the scholarship; relating to Alaska
Advantage education grant funding and to Alaska performance
scholarship funding; establishing an account and fund for
those purposes; making conforming amendments; and providing
for an effective date."
9:04:54 AM
Co-Chair Stedman discussed the agenda and the rules of decorum.
DIANE BARRANS, EXECUTIVE DIRECTOR, POSTSECONDARY EDUCATION
COMMISSION, DEPARTMENT OF EDUCATION, testified in support of the
legislation and expressed appreciation on behalf of the
administration for the bill being heard so early in the process.
She stated that the governor's original request modified the
name of the program to deal with copyright infringement and
provided a stable funding source for statewide scholarships. She
added that the governor was seeking to establish a recurring
fund source. The current bill had been modified to include
funding for Alaska Performance Scholarships (APS) and Alaska
Advantage Education Grants. She observed that Alaska Advantage
Education Grants provided the state's only needs-based financial
aid program for postsecondary education.
9:11:54 AM
Ms. Barrans discussed Sections 1 through 4, 7, 9, 13, and 16;
these sections were the program's "housekeeping components" as
they renamed the scholarship program. She informed the committee
that Section 5 clarified a new process in the event of a funding
shortfall and furthered that if a shortfall was experienced, no
new students would be accepted into the scholarship program.
Section 6 added requirements that are applicable to
postsecondary institutions seeking to participate in APS; this
section required that participating institutions must provide
mandatory counseling and insured that the courses needed for a
student to complete their program on time were available. She
related that Sections 8, 10, and 14 established the accounts, as
well as a fund into which appropriations would be made; these
sections specified that income earned on investments and
donations to the fund were permitted and also provided a funding
scheme. She looked at Sections 11, 12, and 19; these Sections
created tax credits for corporate citizens to make contributions
to the APS and Education Grant funds and also ensured that
contributions remain eligible for the credit in the years
subsequent to the sunset date.
Ms. Barrans indicated that Section 15 contained transition
language, while Sections 17 through 20 dealt with effective
dates. She noted that ideally, new requirements for institutions
would have an effective date of one year later in order to allow
institutions to meet the requirement changes. She stated that
funds were set aside by passing SB 76 the prior session and that
conforming changes to the bill were appropriate. She stressed
that "We stand ready to work with the committee to bring back a
bill that is acceptable to all parties."
9:15:40 AM
Co-Chair Stedman indicated that not everyone was familiar with
the legislation and requested an explanation of the HB 104. Ms.
Barrans explained that the bill modified a program that was put
into statute in 2009; it created a program that incentivized
Alaskans to succeed in school and score well on national exams.
The high school graduating class of 2011 was the first class of
students eligible to receive the scholarship. She said that the
original bill required that the Commission on Postsecondary
Education, the Department of Education (DEED), the Department of
Labor (DLWD), and the University of Alaska report on the
outcomes of the scholarship program; the report was due within
ten days of the start of the current session.
Ms. Barrans highlighted the upcoming report and pointed out that
approximately 2400 Alaskans were eligible in 2011 for the
scholarship, but that only a little over 900 made use of the
program. She furthered that due to the tentative nature of
funding the prior year, many students chose to attend
institutions in other states. She expounded that the
scholarships could not be used at institutions outside of the
state and noted that out of those eligible, almost as many
students attended institutions outside the state as those who
attended in-state institutions. She concluded that over time,
more trend data would be available regarding the scholarship's
eligibility and utilization.
Co-Chair Hoffman wondered how the fund would be split between
the Alaska Advantage Education Grants and APS. Ms. Barrans
replied that there was no prescribed formula for a split. She
continued that there was discussion during the prior session
regarding a formula, but that the offered bill version did not
address that aspect.
Co-Chair Hoffman stated that there was a lot of interest in the
Alaska Advantage Education Grant Fund and that legislators
wanted assurances about what portion would be allocated to that
fund. He queried if the administration had a recommended spilt.
Ms. Barrans responded that there was a discussion about a one-
third/two-thirds split.
9:19:35 AM
Co-Chair Hoffman wondered if the administration felt that the
$400 million set aside would be adequate under a one-third/two-
thirds split. Ms. Barrans replied that the funding was adequate.
She stated that the utilization rates for the scholarship had
been determined based on a proxy, but indicated that the rates
had been adjusted based on actual experiences that year. The
adjusted rates were slightly lower and were reflected in the
updated fiscal notes. She deferred to the Department of Revenue
(DOR) for a discussion regarding what income could be generated
off of the $400 million allocation.
Senator Thomas queried what kind of marketing was in place to
promote the scholarship program. Ms. Barrans replied that the
Commission on Postsecondary Education had been working closely
with DEED and the governor's office to coordinate the marketing.
There was a staff person at DEED who was charged with
disseminating information about the program to the schools,
counselors, principals, and superintendents. The commission used
direct marketing approaches. Information from DEED and the
Permanent Fund Division was used to identify and target students
in order to send information about the program directly to them.
The commission's outreach staff, based in Anchorage, gave public
service announcements that were targeted at students who were
planning for college. She added that the program had no
operating funds and did not have a specific marketing budget.
9:22:37 AM
Senator Ellis expressed concern that rural students could not
realistically access the courses needed to qualify for merit
scholarships. He queried if any changes could be made to HB 104
to address the realistic access of rural students to the courses
needed to compete for scholarships. Ms. Barrans responded that
Commissioner Hanley from DEED was in the room and that he might
want to respond to the question personally. She interjected that
she did not believe the statutory language had been altered to
affect that change. She furthered that data showed that students
from small, remote areas were making it into the program, but
acknowledged that it was more of a challenge for rural students
to qualify. She spoke about the need to make the required
courses "readily available" to all students.
Co-Chair Hoffman asked if an analysis had been done comparing
qualifying students from rural versus urban districts. Ms.
Barrans responded that the analysis was included in the report.
Ms. Barrans stressed that federal privacy laws prevented them
from reporting small graduating classes where the number was
below an established threshold. Reporting on very small numbers,
such as two or three, could lead to the students being
identified as individuals. In order to satisfy federal
requirements, the commission was required to "roll up numbers"
to a district or region level in schools where the graduating
class was too small.
9:26:30 AM
Senator Thomas queried if the increases in the tuition had
prompted any discussion in the administration about increasing
scholarship funding levels. Ms. Barrans replied that the
administration had not had a discussion regarding funding
levels. She indicated that the scholarship levels were fixed to
the 2010-2011 tuition and would have less "buying power," but
added that the dollar levels were set in statute and could be
changed.
Senator Egan wondered how many needs-based requests they had
been receiving. Ms. Barrans replied that they had received about
4400 applicants that year and were able to fund just over 2000
with education grants. Based on the current application volume,
just under $7 million would be needed to fund all student
applicants.
Senator Egan asked if the number of funded students represented
just less than half of the applicants. Ms. Barrans replied that
Senator Egan was correct.
Senator Olsen expressed the importance of a good education. He
noted that HB 104 seemed to put rural school districts at a
disadvantage. He indicated that he would have a hard time
supporting this type of legislation until rural and urban
students were on more equal footing and emphasized to Co-Chair
Stedman that he had "some pretty strong feelings" on the issue.
9:29:34 AM
Co-Chair Stedman stressed the importance of using the sign-up
sheet if you would like to testify on a bill. He listed the five
updated fiscal notes as follows: two zero fiscal notes from DOR,
Treasury and Tax Division, one zero fiscal note from DEED, and
two fiscal impact notes from the Alaska Commission on
Postsecondary Education. One note from the Alaska Commission on
Postsecondary Education contained a $2 million dollar increment
for APS while the other reflected a $3.996 million request in
administration and operating costs. Both fiscal notes included
increasing out-year cost estimates. He mentioned that one of the
fiscal notes had been received that morning and was new to him.
ROBYNN WILSON, AUDIT SUPERVISOR, TAX DIVISION, DEPARTMENT OF
REVENUE (via teleconference), introduced herself and stated that
she was available for questions. Co-Chair Stedman inquired what
the tax credit's net effect was on the state's credit mechanism.
Ms. Wilson replied that HB 104 did not change the amount of
credit available, but it added a category under which an
education credit could be claimed.
9:32:03 AM
Senator Olson wondered if there had been indication that the
private sector wanted to participate in the tax credit program.
Ms. Wilson responded that they had not yet received the tax
returns that would report private sector participation.
Senator Olson furthered that he assumed there was a study
regarding possible private sector participation. He wondered
whether the state would fully fund the program. Ms. Wilson
indicated that DOR did not have a study regarding private sector
participation and furthered that as HB 104 was written, the
state would be fully funding the program.
9:33:36 AM
AT EASE
9:34:19 AM
RECONVENED
Co-Chair Stedman expressed his surprise that no one had signed
up to testify on HB 104.
Co-Chair Hoffman had a question in reference to a fiscal note
prepared by Diane Barrans. He noted that from FY 13 to FY 18,
the number of students entering the program was anticipated to
grow by 35 percent and that the expected payout of the fund will
increase from $6.9 million to $9.6 million. He queried how the
fund would be managed to address the increase in payouts and
whether the fund would be adequate if no additional dollars were
added.
Ms. Barrans asked for clarification on which fiscal note Co-
Chair Hoffman was referring to. Co-Chair Hoffman replied that he
was referring to the fiscal note that the Office of Management
and Budget (OMB) noted as number 2738.
Co-Chair Hoffman reiterated his question. Ms. Barrans replied
that her discussions with DOR led her to believe that
investments from the fund would be based on expected pay outs
and that investment decisions would be aimed at insuring that
the fund was able to cover the costs. She deferred to Jerry
Burnett for a more detailed answer.
Co-Chair Hoffman noted that a high rate of return would be
needed to offset increases in student payouts.
9:37:42 AM
Co-Chair Stedman asked for an explanation of the $400 million
set aside for the fund and wondered what revenue might be earned
off that allocation, including projected shortfalls or
surpluses.
JERRY BURNETT, DIRECTOR, ADMINISTRATIVE SERVICES DIVISION,
DEPARTMENT OF REVENUE, replied that when the bill was originally
introduced, the $400 million was to be invested in a fund with
an annual real rate of return of 5 percent. He stated that the
fund was to be inflation proofed and would earn 7.75 to 8
percent in the current market place. The fund was projected to
earn $20 million the first year and would grow each year. He
noted that "we're looking at less than $20 million in those
first years". DOR would consider the program's costs and would
customize an asset allocation designed to build the fund, based
on the $400 million allocation and the expected future payments.
He observed that the $400 million had earned interest throughout
the year in the general investment fund and that as a result,
the Alaska Housing Capital Corporation had more than the initial
allocation available.
9:39:29 AM
Co-Chair Hoffman queried what interest rate the fund had earned
during the first 6 months. Mr. Burnett replied that he was
unsure, but that he could get that information. He added that
over the past several years, the fund had earned 3 to 4 percent.
He reiterated that the allocation would be customized based on
the future needs of the fund and remarked that fiscal the note
in the packet indicated that based on the house bill's language,
the money would have to be left in the general investment fund.
Co-Chair Hoffman queried if the $400 million would grow by the
anticipated 35 percent between FY 13 to FY 18 in order to meet
the expected payout. Mr. Burnett responded that he believed the
$400 million allocation could potentially earn enough to meet
the payout in FY 18 and expounded that in order to meet the
payouts, DOR could customize an asset allocation that had a
lower probability of loss.
Co-Chair Stedman requested that DOR come back to the committee
with a forecast projecting the initial $400 million input,
including expected withdrawals and payouts. He specified that
the forecast should go through FY 18 or whatever fiscal year DOR
was comfortable projecting to. He observed the similarity to the
Power Cost Equalization program, where the payouts had reached 7
percent and erosion of the principal was a concern. He continued
that the fund could become part of a larger discussion when
oversight was done on various pools of funds.
9:42:27 AM
Co-Chair Hoffman queried if the interest earned from the $400
million was going to pay for the first year of operating
expenses or if additional money would be requested. Mr. Burnett
replied that he made no assertions about how the program would
be funded during the first year and elaborated that because the
$400 million had been earning interest in a segregated fund that
kept its earnings, there was more than $400 million available.
He added that the appropriation to fund was only $400 million.
Senator Ellis queried if students who get GED's qualify for the
merit based scholarship programs and wondered how the program
dealt with students from tumultuous backgrounds, like those
attending military academies and alternative high schools. Ms.
Barrans replied that students would be required to obtain a high
school diploma in order to qualify.
Senator McGuire inquired if the current meeting was the last
hearing on HB 104. Co-Chair Stedman stressed that this was the
first hearing on HB 104 and that more hearings would be held.
9:45:27 AM
Senator McGuire requested that Ms. Barrans give further
explanation of what led to HB 104 and what it accomplished. She
stated that the bill would not be the scholarship for every
Alaskan, but that it was an opportunity for exceptional
students. She continued that special options could be explored
to help rural students and indicated an interest in hearing how
Louisiana had dealt with their rural townships. She stated that
Galena's student program was a model that could be used to
create a program for Alaska's rural students and stressed the
need to enable rural districts to bring students into
compliance, rather than having rigid standards to qualify for
scholarships. She expressed her approval of the intent of HB 104
and a desire to work with DOR through the process. She added
that declining production of the Trans-Alaska Pipeline System
(TAPS) would tighten the state's budget and force the state to
make choices. She indicated that funding might not always be
there for certain programs and that it was DEED's job to "sell"
the program to the legislature.
Ms. Barrans pointed out that HB 104 was not the bill that
created the program. There were many hearings on the original
bill and the legislature had put the program into statute the
prior year. She emphasized that the program had been operating
less than a year and stressed the benefit of several years of
progress before making substantive changes to the program. The
legislation was intended to change the program's name and to
fund the program. She urged that it was important to give the
program time to operate before attempting to fix it and related
that the program was intended to help students make the right
decisions early. She acknowledged that the program was not the
end solution, but that it was a good starting place.
Senator Olson noted that DOR expected to be able to achieve the
7.75 to 8 [percent] interest rate. He wondered what mechanisms
were in place to insure that qualified children were not
overlooked if the expected interest did not accrue. He furthered
that his real question was if DOR was setup to use the funds
that were already in place. Mr. Burnett replied that he was
unable to answer because DOR needed to examine models for future
funding in order to establish an asset allocation for that
purpose. He added that the program could be set up as an
endowment or as fixed income investments that were based on
timing.
9:51:56 AM
Co-Chair Stedman noted that the committee would await the
analysis that Mr. Burnett had referred to and observed that in
the future the committee would look at a multi-year period,
rather than using a six month period and extrapolating it
further out. He announced that the Permanent Fund and the
retirement system would be reviewed in the committee at a later
date. He pointed out that there would be a presentation on the
growth in the Gross Domestic Product (GDP) relative to debt
levels; the presentation would give them a "better feel for what
we can expect out of the performance of our pile of assets that
we've set aside, our cash."
Senator Thomas asked for a written explanation of Ms. Barrans'
response to Senator Egan's question. Ms. Barrans agreed to
provide the information.
9:53:38 AM
House Bill 104 was HEARD and HELD in committee for further
consideration.
9:53:59 AM
AT EASE
9:54:20 AM
RECONVENED
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.
ADJOURNMENT
10:41:09 AM
The meeting was adjourned at 10:41 AM.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 104 - CSHB104(EDC)Sectional ACPE 3 21 11.pdf |
SFIN 1/18/2012 9:00:00 AM |
HB 104 |
| HB 104 - SBOE Letter on APS Resolution to HEDC.pdf |
SFIN 1/18/2012 9:00:00 AM |
HB 104 |
| HB 104 NEW Sectional (RLS).pdf |
SFIN 1/18/2012 9:00:00 AM |
HB 104 |
| HB104 AWIBAPSResolution.pdf |
SFIN 1/18/2012 9:00:00 AM |
HB 104 |
| SB 86 AARP Support.pdf |
SFIN 1/18/2012 9:00:00 AM |
SB 86 |
| SB 86 OLTCO letter of support.PDF |
SFIN 1/18/2012 9:00:00 AM |
SB 86 |
| SB 86 Sectional Analysis.pdf |
SFIN 1/18/2012 9:00:00 AM |
SB 86 |
| SB 86 Sponsor Statement.pdf |
SFIN 1/18/2012 9:00:00 AM |
SB 86 |
| SB 86 summary of changes 4-15-11.pdf |
SFIN 1/18/2012 9:00:00 AM |
SB 86 |
| CS SB 2 Support Letters.PDF |
SFIN 1/18/2012 9:00:00 AM |
SB 2 |
| CS SB 2 DMV Letter.pdf |
SFIN 1/18/2012 9:00:00 AM |
SB 2 |
| CSSB 2 Sponsor Statement.pdf |
SFIN 1/18/2012 9:00:00 AM |
SB 2 |
| SB 2 Explanation of Changes.pdf |
SFIN 1/18/2012 9:00:00 AM |
SB 2 |
| SB 2 Special Request Plates-Fact Sheet.pdf |
SFIN 1/18/2012 9:00:00 AM |
SB 2 |
| SB 86 Support Letter-Office of Long Term Care.pdf |
SFIN 1/18/2012 9:00:00 AM |
SB 86 |
| SB 86 Support Letter-ACoA.pdf |
SFIN 1/18/2012 9:00:00 AM |
SB 86 |
| HB 104 ACPE Letter.pdf |
SFIN 1/18/2012 9:00:00 AM |
HB 104 |
| HB 104 APS Outcomes Report.pdf |
SFIN 1/18/2012 9:00:00 AM |
HB 104 |
| HB 104 DOR Response.pdf |
SFIN 1/18/2012 9:00:00 AM |
HB 104 |
| HB 104 Rodell to SFC 1-30-2012.pdf |
SFIN 1/18/2012 9:00:00 AM |
HB 104 |