HB 8-POWERS OF ATTORNEY  1:54:37 PM CHAIR MCGUIRE announced the consideration of HB 8. [SCS CSHB 8(HSS) was before the committee.] 1:55:24 PM GINGER BLAISDELL, Staff, Representative Shelly Hughes, Alaska State Legislature, presented the following sectional analysis for HB 8, version G, on behalf of the sponsor: Section 1 replaces the current definition of an "agent" with a more nationally recognized term. Section 2 corrects the definition of "state" by including the United States Virgin Islands. Section 3 adds new definitions for "durable," "electronic," "power of attorney," "principal," "record," and "sign," as they pertain to the Act. The definition for "sign" is probably the most significant. An audible or visual designation or signing for someone is now allowed. This is for someone who has full capacity but is inhibited from signing for him/herself due to some physical impairment. Section 4 is a new section that states that an agent is the person granted powers and the finances belong to the principal. It contains the agent's acceptance and liability and describes the agent's duties. It also pertains to the acceptance and termination of a power of attorney. Section 5 recognizes a power of attorney executed in another state. Section 6 edits the power of attorney (POA) form in statute and requires the principal to mark (as opposed to check) a box in each category and provides optional grant of specific authority to create, amend, revoke, or terminate a trust; make a gift; create or change beneficiaries; or revoke a transfer on a death deed; change rights of survivorship; delegate authority; and waive the principal's right to be a beneficiary. For example, a person might want someone to make their house payments, but not sell their house. SENATOR COSTELLO asked what section prevents someone from selling another person's house and taking the payments. MS. BLAISDELL directed attention to page 8, line 19 titled "real estate transactions" and line 23 titled "banking transactions." Checking "No" on line 19 would prohibit someone from making any real estate transactions, and checking "Yes" on line 23 would allow a person to pay the mortgage on behalf of the principal. CHAIR MCGUIRE described this as an excellent provision. She expressed hope that the bill isn't so specific that it leaves out the ability to add protections later on. SENATOR COSTELLO asked the definition of "personal relationships and affairs" on page 8, line 29, because a power of attorney for personal affairs could include real estate transactions. Also, "records, reports, and statements" on page 9, line 1, could be confusing to interpret. She argued that all the categories fall under personal affairs. She asked if there was another intention. MS. BLAISDELL advised that expanded definitions and what would be included in each category appear later in the bill. 2:03:59 PM MS. BLAISDELL continued to discuss Section 6 explaining that page 9 has a new section titled "grant of specific authority," which is optional. These are things that a person may or may not choose to award someone who is managing their finances. These are commonly referred to as "Hot Powers" because they carry more weight than day-to-day transactions. Page 10 updates the term "check" to "mark" so any kind of tangible mark can be accepted in lieu of a signature and "disability" is changed to "incapacity." Page 11 strengthens the notary provision. If a person is selected to sign on behalf of the principal who is physically unable to sign, the notary must document the personal information of the principal and the person signing on the principal's behalf. SENATOR COSTELLO asked the procedure and requirements if the principal is not present at the signing. MS. BLAISDELL clarified that the principal has to physically appear; a person is signing on their behalf because the principal is physically unable to sign. This could be due to arthritis or a broken arm, for example. 2:09:00 PM SENATOR COGHILL related a personal experience, and asked if the potential for intimidation has been considered. MS. BLAISDELL acknowledged that she hadn't completely vetted "intimidation." She continued the sectional analysis: Section 7 changes the term "attorney in fact" to "agent." Section 8 deals with the applicability of provisions and changes terms for consistency. A new paragraph (5) clarifies that if the principal fails to mark either the "yes" or "no" box, or marks both boxes, the agent would not be granted that power. Sections 9-11 remove the term "revoke, create or modify a trust" and includes it in a separate selection on the POA form. Section 12 adds the ability for the agent to use credit and debit cards, and electronic transactions. 2:12:03 PM SENATOR COSTELLO asked what protection a bank would have when the person using the card isn't named on the card. MS. BLAISDELL explained that the bill provides judicial relief and allows someone to look at the agent's actions. She continued the sectional analysis: Section 13 adds additional responsibilities and clarification responsibilities of the agent to manage the affairs of the principal's businesses. Section 14 identifies an additional function of managing the principal's insurance or annuity. Section 15 provides the agent with all the powers to effectively manage the principal's retirement plan(s). 2:15:26 PM Section 16 amends the section regarding personal relationships such as child support under HIPAA rules. SENATOR COGHILL asked how this affects a healthcare directive. MS. BLAISDELL clarified that this does not replace or supersede a healthcare directive. She continued the sectional analysis: Section 17 amends the section regarding government, military service, or civil service. It allows the agent to enroll in, apply for, select, reject, change, amend or discontinue a program. 2:17:49 PM Section 18 adds a new subsection (q) to AS 13.26.344 regarding specific authority with respect to gift transactions. This is one of the Hot Powers where a principal can designate whether or not the agent has powers to designate gifts. Section 19 amends AS 13.26.347 to relieve an agent of liability for breach of duty unless it was committed dishonestly. 2:19:13 PM Section 20 replaces the term "disability or incompetence" with "incapacity." SENATOR COSTELLO asked if incapacity is defined elsewhere. MS. BLAISDELL directed attention to the definition on page 37, line 14. 2:20:00 PM VICE CHAIR COGHILL assumed the gavel. SENATOR COSTELLO asked if this definition matches the definition in the insurance statutes. MS. BLAISDELL confirmed that they match. SENATOR COSTELLO suggested looking to make sure that this definition of "incapacity" matches the specifically delineated definition for healthcare insurance to apply. VICE CHAIR COGHILL suggested that Deborah Behr may have an answer. 2:21:47 PM MS. BLAISDELL continued the sectional analysis. Section 21 clarifies the grounds for determining incapacity of an individual and includes additional provisions such as if the principal is missing, detained or unable to return to the U.S. Section 22 is a technical amendment that inserts the term "agent" and updates the statutory reference. VICE CHAIR COGHILL questioned the reason that Section 21 was repealed and reenacted. MS. BLAISDELL didn't recall the reason. She continued the sectional analysis: Section 23 adds a new section on judicial relief that allows specified individuals to petition the court asking for a review of the agent's conduct. It also adds a new section on relationship to other laws that specifies that the Act does not supersede any other law applicable to a financial institution or other entity; and it allows electronic signatures. [Section 24 is a technical amendment to update terms.] Section 25 adds a new section relating to execution of power of attorney. It states that a power of attorney in this state is valid if the principal signs the form or directs another to sign on his/her behalf and the signature is acknowledged by a notary. She deferred to Deborah Behr for a further explanation. Section 26 is a technical change to remove the term "attorney in fact." Section 27 adds new definitions to AS 13.26. Section 28 adds a new chapter titled "Recognition of Substitute Decision-Making Documents" that requires the state of Alaska to recognize as valid any decision-making documents for a principal as long as they were executed in compliance with the law from the jurisdiction from which they came. 2:27:01 PM SENATOR COSTELLO said that tells her that notary signatures on any document aren't recognized from state-to-state. MS. BLAISDELL said she isn't sure about any document, but it could affect a financial power of attorney or healthcare directive. She continued the sectional analysis: Section 28, page 40, also adds definitions clarifying what it means when accepting documents between states. Section 29 repeals AS 13.26.338(a), AS 13.26.344(n) and AS 13.26.353(c). Section 30 is the applicability section. A power of attorney formed prior to the effective date of the Act is not nullified. Section 31 provides an effective date of January 1, 2017. 2:30:00 PM REPRESENTATIVE SHELLEY HUGHES, Alaska State Legislature, sponsor of HB 8, stated that elders and vulnerable individuals in this state are valued and honored, but they need certain protections. She highlighted that AARP, the Association of Mature Americans and other senior groups support the bill because they see the need. In Alaska, there are 600 allegations of financial exploitation and many of those involve the misuse of a power of attorney. These clarifications will strengthen the statutes, protect vulnerable individuals and guide those caring for them. 2:31:56 PM SENATOR WIELECHOWSKI asked if she had a list of where the bill deviates from the Uniform Power of Attorney. MS. BLAISDELL agreed to share a copy of the 175 page document. She explained that the Uniform Law Commission compared, line by line, the Alaska statutes to their model bill. The sponsor, long term care ombudsman and an assistant attorney general then reviewed the comparison. SENATOR WIELECHOWSKI said he's interested in the meaningful policy decisions, not clerical or technical changes. VICE CHAIR COGHILL expressed interest in seeing where Alaska law departs from the model legislation. 2:34:09 PM DEBORAH BEHR, Member, Alaska Uniform Law Delegation, stated that Alaska has been a member of the commission since 1914. She explained that this confederation of states looks at things that are appropriate to be uniform among the states. The model bill took 3-4 years to complete and uses what all states could accept and the courts could interpret uniform across the states. That is the goal of a Uniform Act. She described the first 37 pages of the bill as an Alaska version of the Uniform Act and deferred further comment on those pages to the sponsor. Page 38 forward is the Uniform Act that allows for recognition of substitute decision-making documents, primarily the power of attorney and the advanced healthcare directive. It establishes a uniform process for these documents to be accepted quickly from state to state without having to go to court. She provided examples. She noted that she suggested four technical amendments to the sponsor's staff to make the bill work better. She also described the power of attorney improvements in the bill as excellent compared to current Alaska law, but not uniform. 2:39:47 PM SENATOR COSTELLO asked if pages 1-37 have elements that were vetted and ultimately rejected by the national committee or developed in Alaska. MS. BEHR said her understanding is that the sponsor looked at the Uniform Act and reviewed it with a variety of Alaska groups before making Alaska-specific changes. She opined that one of the major differences between the documents is the statutory form itself. The Alaska form requires "yes" or "no" responses to options, whereas the Uniform Act form only requires a person to initial the options he/she wants. The terminology in the standard form is also slightly different than the Alaska form. While she believes this will cause interpretation problems, it is a vast improvement over the existing power of attorney law. SENATOR COSTELLO asked if the Uniform Law Commission considered and rejected the "yes" or "no" method for selecting options or if it's unique to Alaska. MS. BEHR replied, "If we do a yes/no, we'll be the only state in the union, to my knowledge, to do this." 2:43:18 PM RACHAEL GREENBERG stated that she is representing AgeNet, a group of 40 agencies that provide services to over 10,000 seniors around the state. Their priority is to protect older Alaskans from elder financial abuse, exploitation and harm. HB 8 provides this protection. She disclosed that she is also the executive director of MatSu Senior Services and when they assist with a power of attorney form, they ask the agent to step out of the room to avoid the potential for coercion. On a regular basis there are misunderstandings about the specific powers that a power of attorney provides, and HB 8 will strengthen that protection for elders. She urged the committee to support the bill. VICE CHAIR COGHILL noted that the bill requires a person who is not physically able sign to give verbal consent. He asked if she's had that experience. MR. GREENBERG answered yes; they've had a number of people who could not sign their name because of arthritis or blindness, but they were cognitively aware and knew exactly what they wanted. The existing law makes this process difficult, she said. VICE CHAIR COGHILL said the committee will be looking for cognitive capacity because of the prevalence of early-onset dementia to Alzheimer's. MS. GREENBERG clarified that they won't notarize a signature if a person has early-stage dementia. 2:47:40 PM VICE CHAIR COGHILL asked Ms. Behr how close the definition for "incapacity" is to the Uniform Law. MS. BEHR said she believes the Alaska definition is very close but she'd have to match it word-for-word. She added that the existing definition in statute focuses on medical issues and the bill adds concepts to deal with more than that. She cited the example of reporters who were kidnapped while on overseas assignment and pointed out that somebody has to conduct their business during that time. VICE CHAIR COGHILL asked how close the bill is to the Uniform Act with respect to a person who is physically unable to sign but cognitively aware. MS. BEHR directed attention to the provisions on page 11, lines 29-31. She said they were added in a previous committee and to her knowledge they are not part of the Uniform form. She acknowledged that this may address problems that Alaska has experienced. VICE CHAIR COGHILL asked Ms. Blaisdell her perspective. MS. BLAISDELL said the Uniform law form asks the person to initial each item they want and HB 8 asks the person to select either "yes" or "no" for each option. 2:51:40 PM VICE CHAIR COGHILL said he would leave public testimony open. He asked Ms. Behr who generally holds people to account when they have a power of attorney for another person, primarily a family member. MS. BEHR deferred the question to the senior advocates because they've been collecting the complaints. She added that there have been an estimated 600 complaints filed and her understanding is that the "war stories" relate to gifts. VICE CHAIR COGHILL held HB 8 in committee with public testimony open.