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A BILL TO BE ENTITLED
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AN ACT
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relating to requiring dealers and investment advisers to report |
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suspected financial abuse of elderly persons; providing a civil |
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penalty; creating a criminal offense. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. The Securities Act (Article 581-1 et seq., |
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Vernon's Texas Civil Statutes) is amended by adding Section 45 to |
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read as follows: |
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Sec. 45. REPORTING OF FINANCIAL ABUSE OF ELDERLY PERSONS. |
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A. In this section: |
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(1) "Adult protective services division" means the |
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adult protective services division of the Department of Family and |
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Protective Services. |
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(2) "Elderly person" has the meaning assigned by |
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Section 48.002, Human Resources Code. |
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(3) "Financial abuse" means the wrongful or negligent |
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taking, appropriation, obtaining, retention, or use of, or |
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assisting in the wrongful or negligent taking, appropriation, |
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obtaining, retention, or use of, money or other property of another |
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person by any means, including by exerting undue influence. The |
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term includes financial exploitation. |
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(4) "Financial exploitation" means the wrongful or |
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negligent taking, appropriation, obtaining, retention, or use of |
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money or other property of another person by a person who has a |
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relationship of confidence or trust with the other person. |
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Financial exploitation may involve coercion, manipulation, |
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threats, intimidation, misrepresentation, or the exerting of undue |
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influence. The term includes: |
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(A) the breach of a fiduciary relationship, |
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including the misuse of a durable power of attorney or the abuse of |
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guardianship powers, that results in the unauthorized |
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appropriation, sale, or transfer of another person's property; |
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(B) the unauthorized taking of personal assets; |
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(C) the misappropriation, misuse, or |
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unauthorized transfer of another person's money from a personal or |
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a joint account; and |
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(D) the negligent or intentional failure to |
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effectively use another person's income and assets for the |
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necessities required for the person's support and maintenance. |
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B. For purposes of Subsection A of this section, a person |
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has a relationship of confidence or trust with another person if the |
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person: |
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(1) is a parent, spouse, adult child, or other |
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relative by blood or marriage of the other person; |
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(2) is a joint tenant or tenant-in-common with the |
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other person; |
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(3) has a legal or fiduciary relationship with the |
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other person; |
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(4) is a financial planner or investment professional |
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who provides services to the other person; or |
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(5) is a paid or unpaid caregiver of the other person. |
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C. Notwithstanding any other law, if an agent or investment |
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adviser representative has a good faith belief that financial abuse |
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of an elderly person has occurred or is occurring, the agent or |
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investment adviser representative shall immediately notify the |
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dealer or investment adviser, as appropriate, for whom the agent or |
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investment adviser representative is providing services. |
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D. On receiving the notification made under Subsection C of |
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this section or if a dealer or investment adviser has a good faith |
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belief that financial abuse of an elderly person has occurred or is |
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occurring, the dealer or investment adviser, as appropriate, shall: |
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(1) subject to Subchapter B-1, Chapter 48, Human |
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Resources Code, make a report notifying the adult protective |
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services division of the suspected financial abuse; and |
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(2) notify the appropriate local law enforcement |
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agency with jurisdiction over the municipality or county in which |
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the elderly person resides of the suspected financial abuse for |
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purposes of investigating and determining whether an offense under |
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Section 32.53, Penal Code, or other law has occurred. |
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E. The report and notification required by Subsection D of |
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this section must be made: |
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(1) by telephone or electronic means, not later than |
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24 hours after the dealer or investment adviser receives |
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notification of suspected financial abuse or believes in good faith |
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that suspected financial abuse occurred or is occurring; and |
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(2) in writing, not later than the third business day |
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after the date the dealer or investment adviser receives |
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notification of suspected financial abuse or believes in good faith |
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that suspected financial abuse occurred or is occurring. |
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F. For purposes of Subsection C of this section, a person's |
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good faith belief must be acquired in connection with the provision |
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of services by the person to or on behalf of the elderly person and |
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must be based on: |
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(1) the person's observation or knowledge of an |
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incident of suspected financial abuse, if the person has direct |
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contact with the elderly person; or |
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(2) the presence of information indicating potential |
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financial abuse during a review or approval process performed by |
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the person in connection with the provision of services, if the |
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person does not have direct contact with the elderly person but |
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reviews or approves the elderly person's transactions, documents, |
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or records. |
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G. Nothing in this section shall be construed to require a |
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dealer or investment adviser to investigate an allegation of |
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financial abuse made by an elderly person or other person. |
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H. Except as provided by Subsection I of this section, the |
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following information is confidential and is not subject to |
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disclosure to the public, except under court order: |
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(1) the information contained in a report or |
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notification made under Subsection D of this section; |
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(2) the identity of any informing agent or investment |
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adviser representative under Subsection C of this section or the |
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name of the dealer or investment adviser making the report or |
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notification under Subsection D of this section; and |
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(3) information provided by or submitted to a dealer |
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or investment adviser in connection with an investigation arising |
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out of a report or notification made under Subsection D of this |
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section. |
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I. Information that is confidential under Subsection H of |
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this section may be disclosed only: |
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(1) to the adult protective services division or |
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another state agency, a law enforcement agency, or the attorney |
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general, in connection with the reporting or notification of or an |
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investigation of suspected financial abuse of the elderly person to |
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whom the information pertains; |
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(2) to, or as authorized by, the elderly person or the |
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guardian of the elderly person, unless the dealer or investment |
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adviser suspects the guardian of financial abuse of the elderly |
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person; or |
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(3) as part of a civil or criminal action related to |
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the suspected financial abuse of the elderly person. |
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J. A person commits an offense if the person discloses |
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confidential information in violation of this section. An offense |
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under this subsection is a Class C misdemeanor. |
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K. A dealer or investment adviser that, or an agent or |
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investment adviser representative who, makes a report or |
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notification in good faith under Subsection C or D of this section |
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is immune from any criminal or civil liability arising from: |
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(1) the report or notification; or |
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(2) participation in any judicial proceeding arising |
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from the report or notification. |
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L. A dealer or investment adviser that fails to make a |
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report or notification in violation of this section is liable to |
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this state for a civil penalty in an amount not to exceed $25,000, |
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unless a court finds the violation to be wilful, in which case the |
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amount of the civil penalty may not exceed $100,000. |
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M. The attorney general may bring an action on behalf of |
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this state to recover a civil penalty under Subsection L of this |
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section. |
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N. Subject to Section 48.072, Human Resources Code, the |
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Board and the executive commissioner of the Health and Human |
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Services Commission, after consulting with the Securities |
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Commissioner and the Department of Family and Protective Services, |
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shall jointly adopt rules necessary to implement this section, |
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including rules that require each dealer or investment adviser to |
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implement a training program to: |
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(1) assist the agents or investment adviser |
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representatives, as appropriate, in recognizing signs of potential |
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financial abuse of an elderly person; and |
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(2) inform the agents or investment adviser |
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representatives, as appropriate, about the reporting and |
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notification requirements of this section. |
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SECTION 2. Subchapter A, Chapter 48, Human Resources Code, |
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is amended by adding Section 48.008 to read as follows: |
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Sec. 48.008. CONSOLIDATION OF CERTAIN REPORTS. If |
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cost-effective and feasible, the executive commissioner by rule may |
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consolidate the form and procedures used to submit a report under |
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Sections 48.051 and 48.072. |
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SECTION 3. Chapter 48, Human Resources Code, is amended by |
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adding Subchapter B-1 to read as follows: |
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SUBCHAPTER B-1. FINANCIAL ABUSE OF ELDERLY PERSONS |
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Sec. 48.071. DEFINITIONS. In this subchapter: |
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(1) "Dealer" and "investment adviser" have the |
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meanings assigned by Section 4, The Securities Act (Article 581-4, |
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Vernon's Texas Civil Statutes). |
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(2) "Financial abuse" has the meaning assigned by |
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Section 45, The Securities Act (Article 581-45, Vernon's Texas |
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Civil Statutes). |
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(3) "Securities board" means the State Securities |
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Board. |
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Sec. 48.072. CERTAIN REPORTS OF SUSPECTED FINANCIAL ABUSE. |
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(a) The executive commissioner, after consultation with the |
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securities board, by rule shall prescribe the form and content of |
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the report required to be made by a dealer or investment adviser |
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under Section 45, The Securities Act (Article 581-45, Vernon's |
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Texas Civil Statutes). A report made by a dealer or investment |
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adviser under Section 45, The Securities Act (Article 581-45, |
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Vernon's Texas Civil Statutes), constitutes a report of suspected |
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financial abuse of an elderly person for purposes of this |
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subchapter. |
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(b) In adopting rules under this section, the executive |
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commissioner shall ensure that a report of suspected financial |
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abuse of an elderly person described by Subsection (a) includes to |
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the extent possible the same information required to be included in |
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a report under Section 48.051(d). |
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(c) A dealer or investment adviser that makes a report to |
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the department of suspected financial abuse of an elderly person |
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under Section 45, The Securities Act (Article 581-45, Vernon's |
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Texas Civil Statutes), in accordance with this section is not |
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required to make an additional report of suspected abuse, neglect, |
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or exploitation under Section 48.051 for the same conduct |
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constituting the financial abuse reported under this section. |
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Sec. 48.073. ASSESSMENT, INVESTIGATION, AND DISPOSITION OF |
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REPORTS. (a) The executive commissioner by rule shall adopt |
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procedures for the assessment, investigation, and disposition of a |
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report of suspected financial abuse of an elderly person received |
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under Section 45, The Securities Act (Article 581-45, Vernon's |
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Texas Civil Statutes), that must be similar to the procedures used |
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for the assessment, investigation, and disposition of a report of |
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abuse, neglect, or exploitation received by the department under |
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this chapter, other than a report received under Subchapter F. |
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(b) The procedures adopted under this section must require: |
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(1) a risk assessment similar to the assessment |
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required under Section 48.004; |
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(2) investigations similar to the investigations |
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required under Subchapter D, including requirements that the |
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department: |
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(A) take action on a report within the time frame |
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and in the manner provided by Section 48.151; |
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(B) perform an interview with the elderly person |
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similar to the interview required by Section 48.152; |
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(C) if appropriate, implement a system to |
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investigate complex cases similar to the system implemented under |
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Section 48.1521; |
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(D) report criminal conduct to appropriate law |
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enforcement agencies similar to the reports under Section 48.1522; |
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and |
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(E) review certain cases involving multiple |
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reports under Section 48.051 and this subchapter similar to the |
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review performed under Section 48.1523; and |
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(3) a determination of services similar to the |
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determination required by Section 48.202. |
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Sec. 48.074. AUTHORITY OF DEPARTMENT OR OTHER AGENCY. The |
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department or another appropriate state agency has the authority to |
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act on or with respect to an allegation of financial abuse of an |
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elderly person under this subchapter to the same extent the |
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department or other agency has the authority to act on or with |
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respect to an allegation of abuse, neglect, or exploitation under |
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Subchapter B. |
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Sec. 48.075. ACCESS TO INVESTIGATION. (a) To implement an |
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investigation of reported financial abuse of an elderly person, the |
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probate court, as defined by Section 22.007, Estates Code, may |
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authorize entry into the place of residence of an elderly person. |
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(b) A peace officer shall accompany and assist the person |
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making a court-ordered entry under this section if the court |
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determines that action is necessary. |
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Sec. 48.076. INTERFERENCE WITH INVESTIGATION OR SERVICES |
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PROHIBITED. (a) Notwithstanding Section 1151.001, Estates Code, a |
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person, including a guardian, may not interfere with: |
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(1) an investigation by the department or by another |
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protective services agency of suspected financial abuse of an |
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elderly person; or |
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(2) the provision of protective services to an elderly |
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person. |
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(b) The department or another protective services agency |
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may petition the appropriate court to enjoin any interference with: |
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(1) an investigation of suspected financial abuse of |
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an elderly person under this subchapter; or |
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(2) the provision of protective services, such as |
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removing an elderly person to safer surroundings or safeguarding |
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the elderly person's resources from financial abuse. |
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Sec. 48.077. MEMORANDUM OF UNDERSTANDING. The commission, |
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the Securities Commissioner, and the department shall enter into a |
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memorandum of understanding regarding the reporting and |
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investigation of suspected financial abuse of an elderly person |
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under this subchapter. |
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Sec. 48.078. CONFIDENTIALITY. (a) All files, reports, |
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records, communications, and working papers used or developed by |
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the department or other state agency in an investigation made under |
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this subchapter or in providing services as a result of an |
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investigation are confidential and not subject to disclosure under |
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Chapter 552, Government Code. |
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(b) The department or investigating state agency may |
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establish procedures to exchange with another state agency or |
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governmental entity information that is necessary for the |
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department, state agency, or governmental entity to properly |
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execute its respective duties and responsibilities to provide |
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services to elderly persons under this chapter or other law. An |
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exchange of information under this subsection does not affect |
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whether the information is subject to disclosure under Chapter 552, |
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Government Code. |
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SECTION 4. Subchapter C, Chapter 48, Human Resources Code, |
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is amended by adding Section 48.104 to read as follows: |
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Sec. 48.104. NONAPPLICABILITY. (a) This subchapter does |
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not apply to a report of financial abuse of an elderly person made |
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under Subchapter B-1. |
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(b) The confidentiality of information received or provided |
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by the department in connection with a report of financial abuse of |
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an elderly person made under Subchapter B-1 is governed by Section |
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48.078 and by Section 45, The Securities Act (Article 581-45, |
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Vernon's Texas Civil Statutes). |
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SECTION 5. Subchapter D, Chapter 48, Human Resources Code, |
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is amended by adding Section 48.1511 to read as follows: |
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Sec. 48.1511. NONAPPLICABILITY. This subchapter does not |
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apply to an investigation conducted under Subchapter B-1 unless the |
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executive commissioner by rule requires the application of a |
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provision of this subchapter. |
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SECTION 6. This Act takes effect September 1, 2017. |