HB 5-CONSERVATOR OF PROTECTED PERSONS  1:50:33 PM CHAIR MCGUIRE announced the consideration of HB 5. "An Act relating to the persons who may be appointed conservators of a protected person." She asked for a motion to adopt the proposed committee substitute (CS). 1:50:47 PM SENATOR COGHILL motioned to adopt the proposed committee substitute for HB 5, labeled 29-LS0032\N, as the working document. CHAIR MCGUIRE found no objection and announced that version N was before the committee. 1:51:16 PM MS. SALTZMAN reviewed the changes in the CS. Section 1 broadens the scope of who could be appointed a conservator and a guardian in cases of a conflict of interest. Page 1, lines 6-8, deletes the language "the person is the spouse, adult child, parent, or sibling of the incapacitated person and". Section 2 adds a new subsection [g] to AS 13.26.145 on page 2, lines 1-4, that provides an extra level of due diligence by the court relating to the nature and scope of the conflict of interest. Section 3 on page 2, lines 7-8, deletes the language "the person is the spouse, adult child, parent, or sibling of the incapacitated person and". Section 4 adds a new subsection [h] to AS 12.26.210 on page 2, lines 11-15, that provides an extra level of due diligence by the court relating to the nature and scope of the conflict of interest. She noted that the guardianship and conservator statutes mirror one another so both had to be amended with the same language. This work was done working closely with the sponsor and the Department of Law. CHAIR MCGUIRE thanked Ms. Saltzman for her work. 1:55:18 PM ALEX HILDEBRANDT, Assistant District Attorney, Civil Division, Human Services Section, Department of Law (DOL), introduced himself. SENATOR WIELECHOWSKI expressed the concern that removing the language in Sections 1 and 3 could potentially create a cottage industry for professionals and businesses to act as conservators and charge exorbitant amounts. MR. HILDEBRANDT pointed out that the option to have a professional conservator or guardian already exists. Banks and trusts generally serve in this capacity, but in Anchorage there are also private parties that have taken on the responsibility. He opined that the court oversight will prevent exploitation of the vulnerable adults. SENATOR WIELECHOWSKI asked if this would allow someone with a potential conflict of interest to act as a conservator, and if he is comfortable that the courts will be able to adequately protect the vulnerable people. MR. HILDEBRANDT acknowledged that the Department of Health and Social Services (DHSS) has that concern about changing the language. The hope is that the new subsections in the guardianship and conservatorship statutes will require the court to think about and provide written findings about whether or not a conflict exists and whether it is or is not substantial. The situation of an unrelated paid care provider serving as a conservator would likely rise to the level of a substantial conflict. Based on his experience doing these hearings, he believes the court would be reluctant to appoint a direct service provider. This language intentionally mirrors the Uniform Probate Code, which prevents direct service providers and things like a long- term care home from being a guardian or conservator for finances and other aspects of a person's life. 2:00:01 PM SENATOR WIELECHOWSKI asked to hear from Department of Health and Social Services (DHSS). SENATOR MICCICHE asked if a spouse or step child from a former marriage would be recognized as a relative or friend of an incapacitated person. MR. HILDEBRANDT responded that AS 13.26.145(d) lists the people qualified for appointment as guardian and it includes a spouse. SENATOR COGHILL offered his understanding that the courts are already familiar with determining potential conflict, substantial interest, and best interest. MR. HILDEBRANDT agreed that those findings are already in statute as things the court should consider. He pointed out that this will require the court to also make a written finding. SENATOR COGHILL asked how the court will vet the appointments. MR. HILDEBRANDT responded that, based on his experience, the group of people who could be appointed as a guardian or conservator is not expanding. What is expanding is the group of people who could be appointed with a conflict. SENATOR COGHILL said he's trying to understand how it will play out in court, but he generally likes the idea. 2:06:55 PM DEB ETHERIDGE, Deputy Director, Division of Senior and Disabilities Services, Department of Health and Social Services (DHSS), introduced herself. SENATOR WIELECHOWSKI asked if she had concerns with the bill. MS. ETHERIDGE said the bill deviates from the [Uniform Probate Code] and other standards, but DHSS is more comfortable with the current committee substitute because it provides additional protection by requiring the court to make the determination. SENATOR WIELECHOWSKI asked the rationale for not allowing people that are not the spouse, adult child, parent, or sibling to be appointed as guardian or conservator of an incapacitated person. MS. ETHERIDGE explained that it's considered a significant conflict when a person can pay him or herself with money they're controlling for somebody who is incapacitated or vulnerable. SENATOR WIELECHOWSKI expressed concern with the way the statute is written because it doesn't clarify what constitutes a substantial conflict. MS. ETHERIDGE said she couldn't alleviate the concern, but it appears that the court could identify it as a substantial conflict of interest if a person would be paying him or herself. SENATOR WIELECHOWSKI asked what percentage of the people who have applied to be a conservator in the last couple of years are spouses, adult children, parents, or siblings. MS. ETHERIDGE said she didn't have access to that information but about 52 percent of the guardianship and conservatorship reports for adult protective services are related to a family member. She clarified that a report to adult protection is mandatory if there is a suspicion that exploitation may be occurring, but it doesn't necessarily mean that maltreatment or financial exploitation has occurred. SENATOR WIELECHOWSKI asked what oversight the court has after it allows someone who has a conflict to watch over a vulnerable or incapacitated person. MS. ETHERIDGE replied there are annual reports and anyone can file a request for a review of a guardian or conservator. 2:12:10 PM SENATOR MICCICHE asked how many of the 52 percent she referenced are compensated. MS. ETHERIDGE said she doesn't have that information. Responding to a further question, she explained that adult protective services receives allegations about the use of the vulnerable adult's funds that are not related to their needs. Those allegations are investigated. SENATOR MICCICHE asked if the conflict is that they're being compensated for the service and they're paying themselves. MS. ETHERIDGE replied DHSS gets allegations about using funds for other than the needs of the vulnerable adult. CHAIR MCGUIRE commented on the protections that are embedded in other areas of the law. 2:14:04 PM SENATOR WIELECHOWSKI asked how many claims DHSS receives in a year about people who are taking advantage of a vulnerable adult. MS. ETHERIDGE reported that in FY2014 DHSS received 1,069 reports of self-neglect, 682 reports of neglect, 492 reports of financial exploitation, 79 reports of exploitation of a person, 194 reports of mental abuse, 208 reports of physical abuse, 51 reports of sexual abuse, and 64 reports of abandonment. In FY2014 DHSS received 535 allegations of financial exploitation, investigated 492, and substantiated 20 percent of the allegations. SENATOR WIELECHOWSKI asked for a copy of the list. MS. ETHERIDGE agreed. 2:16:12 PM SENATOR MICCICHE asked if the department reviews cases as opposed to investigating complaint-driven reports. MR. HILDEBRANDT explained that adult protective services doesn't automatically conduct reviews, but anyone can file asking for one. The division is required to provide a financial report every year and a court-appointed third party is appointed every three years to review and assess the guardianship or conservatorship. 2:17:45 PM DARIN COLBRY, representing himself, Anchorage, Alaska, testified in support of HB 5. He advised that he contacted the sponsor about introducing the bill. He and his wife both have conservators. His father is his conservator and his wife would like her father-in-law to be her conservator too, but that's prohibited because it's a substantial conflict of interest. CHAIR MCGUIRE stated that the legislature and this committee expect the courts to look closely and analyze the situation carefully before appointing someone who has a substantial conflict of interest as a guardian or conservator. The intent is to allow people who need a conservator to have as many options as possible. 2:22:02 PM NANCY MEADE, General Counsel, Administrative Staff, Alaska Court System, said she would relay that to the court but with the understanding that judges and other judicial officers already take very seriously the appointments of conservators and guardians. She explained the process to become a conservator for financial decisions or a guardian for medical decisions. Addressing Senator Micciche's question, she advised that the order says that someone who is not a professional company that provides conservatorship or guardianship services on a regular basis is considered a relative or friend and therefore must take the training program. Those classes are offered by both the court and executive branch. MS. MEADE pointed out that in about 40 percent of the cases that are filed for a guardianship or conservatorship, the court determines that the person is not incapacitated so they do not need protection. She said the court doesn't collect data about how often an applicant has one of the conflicts of interest identified in AS 13.26.210(b), but judges she polled did not think it was extremely common. Family members usually don't have a conflict of interest, although they often take payment from the funds of the protected person. Addressing a question from the previous hearing, she explained that the power of attorney is a private contract that has to be entered when a person has the legal capacity to enter a contract. It can be limited in time and scope and doesn't necessarily preclude the person from acting for him or herself during the life of the contract. A conservatorship is a court document that says a person is permitted to make financial decisions for someone who is not able to make decisions for him or herself. She noted that adult children often pay bills for their parents and only get a conservatorship if they're challenged by a bank or other financial entity. 2:27:33 PM SENATOR WIELECHOWSKI asked if the requirement in Section 4 for the court to make written findings will potentially impose a fiscal burden on the court. MS. MEADE said she didn't anticipate a fiscal impact, although both Section 2 and Section 4 will add to the court's workload. She explained how it potentially would work to comply with the statute and ensure that if an appointment is made under subsection (c) that everyone has thought about it and made those best-interest findings. SENATOR COGHILL asked if in Section 4 the conflict of interest on page 2, line 15, should be described as a perceived conflict. MS. MEADE replied her reading is that the wording is adequate and appropriate. A conflict of interest necessarily exists for subsection (h) to apply. 2:30:02 PM CHAIR MCGUIRE closed public testimony and solicited a motion. 2:30:20 PM SENATOR COGHILL motioned to report the Senate CS for HB 5 from committee with individual recommendations and attached zero fiscal note. 2:30:51 PM SENATOR WIELECHOWSKI said he wouldn't object to moving the bill but wanted his concerns on the record, because this is patching a law that is very outdated when it needs a comprehensive overhaul. He suggested that the sponsor may want to look at that for next year. 2:32:16 PM CHAIR MCGUIRE announced that without objection SCS HB 5(JUD) is reported from the Senate Judiciary Standing Committee.