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A BILL TO BE ENTITLED
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AN ACT
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relating to the financial exploitation of certain vulnerable |
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adults. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subtitle Z, Title 3, Finance Code, is amended by |
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adding Chapter 280 to read as follows: |
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CHAPTER 280. PROTECTION OF VULNERABLE ADULTS FROM FINANCIAL |
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EXPLOITATION |
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Sec. 280.001. DEFINITIONS. In this chapter: |
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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) "Exploitation" means the act of forcing, |
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compelling, or exerting undue influence over a person causing the |
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person to act in a way that is inconsistent with the person's |
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relevant past behavior or causing the person to perform services |
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for the benefit of another person. |
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(3) "Financial exploitation" means: |
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(A) the wrongful or unauthorized taking, |
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withholding, appropriation, or use of the money, assets, or other |
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property or the identifying information of a person; or |
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(B) an act or omission by a person, including |
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through the use of a power of attorney on behalf of, or as the |
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conservator or guardian of, another person, to: |
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(i) obtain control, through deception, |
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intimidation, fraud, or undue influence, over the other person's |
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money, assets, or other property to deprive the other person of the |
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ownership, use, benefit, or possession of the property; or |
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(ii) convert the money, assets, or other |
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property of the other person to deprive the other person of the |
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ownership, use, benefit, or possession of the property. |
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(4) "Financial institution" has the meaning assigned |
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by Section 277.001. |
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(5) "Vulnerable adult" means: |
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(A) an elderly person as that term is defined by |
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Section 48.002, Human Resources Code; |
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(B) a person with a disability as that term is |
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defined by Section 48.002, Human Resources Code; or |
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(C) an individual receiving services as that term |
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is defined by rule by the executive commissioner of the Health and |
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Human Services Commission as authorized by Section 48.251(b), Human |
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Resources Code. |
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Sec. 280.002. REPORTING SUSPECTED FINANCIAL EXPLOITATION |
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OF VULNERABLE ADULTS. (a) If an employee of a financial |
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institution has cause to believe that financial exploitation of a |
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vulnerable adult who is an account holder with the financial |
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institution has occurred, is occurring, or has been attempted, the |
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employee shall notify the financial institution of the suspected |
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financial exploitation. |
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(b) If a financial institution is notified of suspected |
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financial exploitation under Subsection (a) or otherwise has cause |
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to believe that financial exploitation of a vulnerable adult who is |
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an account holder with the financial institution has occurred, is |
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occurring, or has been attempted, the financial institution shall |
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investigate the suspected financial exploitation and submit a |
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report to the adult protective services division in accordance with |
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Subchapter B-1, Chapter 48, Human Resources Code. The financial |
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institution shall submit the report required by this subsection not |
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later than the earlier of: |
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(1) the date the financial institution completes the |
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investigation; or |
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(2) the fifth business day after the date the |
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financial institution is notified of the suspected financial |
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exploitation under Subsection (a) or otherwise has cause to believe |
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that the suspected financial exploitation has occurred, is |
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occurring, or has been attempted. |
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(c) Each financial institution shall adopt internal |
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policies, programs, plans, or procedures for: |
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(1) the employees of the financial institution to make |
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the notification required under Subsection (a); and |
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(2) the financial institution to conduct the |
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investigation and submit the report required under Subsection (b). |
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(d) The policies, programs, plans, or procedures adopted |
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under Subsection (c) may authorize the financial institution to |
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report the suspected financial exploitation to other appropriate |
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agencies and entities in addition to the adult protective services |
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division, including the attorney general, the Federal Trade |
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Commission, and the appropriate law enforcement agency. |
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Sec. 280.003. NOTIFYING THIRD PARTIES OF SUSPECTED |
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FINANCIAL EXPLOITATION OF VULNERABLE ADULTS. If a financial |
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institution submits a report of suspected financial exploitation of |
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a vulnerable adult to the adult protective services division under |
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Section 280.002(b), the financial institution may at the time the |
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financial institution submits the report also notify a third party |
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reasonably associated with the vulnerable adult of the suspected |
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financial exploitation, unless the financial institution suspects |
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the third party of financial exploitation of the vulnerable adult. |
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Sec. 280.004. TEMPORARY HOLD ON TRANSACTIONS IN CERTAIN |
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CASES OF SUSPECTED FINANCIAL EXPLOITATION OF VULNERABLE ADULTS. |
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(a) Notwithstanding any other law, if a financial institution |
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submits a report of suspected financial exploitation of a |
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vulnerable adult to the adult protective services division under |
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Section 280.002(b), the financial institution: |
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(1) may place a hold on a transaction involving an |
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account of the vulnerable adult; and |
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(2) must place a hold on a transaction involving an |
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account of the vulnerable adult if the hold is requested by the |
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adult protective services division or a law enforcement agency. |
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(b) Subject to Subsection (c), a hold placed on a |
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transaction under Subsection (a) expires on the 10th business day |
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after the date the financial institution submits the report under |
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Section 280.002(b). |
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(c) The financial institution may extend a hold placed on a |
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transaction under Subsection (a) for a period not to exceed 30 |
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business days after the expiration of the period prescribed by |
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Subsection (b) if requested by a state or federal agency or a law |
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enforcement agency investigating the suspected financial |
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exploitation. The financial institution may also petition a court |
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to extend a hold placed on a transaction under Subsection (a) beyond |
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the period prescribed by Subsection (b). A court may enter an |
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order extending or shortening a hold or providing other relief. |
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Sec. 280.005. IMMUNITY. (a) An employee of a financial |
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institution who makes a notification under Section 280.002(a), a |
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financial institution that submits a report under Section |
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280.002(b) or makes a notification under Section 280.003, or an |
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employee who or financial institution that testifies or otherwise |
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participates in a judicial proceeding arising from a notification |
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or report is immune from any civil or criminal liability arising |
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from the notification, report, testimony, or participation in the |
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judicial proceeding, unless the employee or financial institution |
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acted in bad faith or with a malicious purpose. |
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(b) A financial institution that in good faith and with the |
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exercise of reasonable care places or does not place a hold on a |
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transaction under Section 280.004(a)(1) is immune from any civil or |
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criminal liability or disciplinary action resulting from that |
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action or failure to act. |
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Sec. 280.006. RECORDS. To the extent permitted by state or |
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federal law, a financial institution shall provide, on request, |
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access to or copies of records relevant to the suspected financial |
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exploitation of a vulnerable adult to the adult protective services |
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division, a law enforcement agency, or a prosecuting attorney's |
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office, either as part of a report to the adult protective services |
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division, law enforcement agency, or prosecuting attorney's office |
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or at the request of the adult protective services division, law |
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enforcement agency, or prosecuting attorney's office in accordance |
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with an investigation. |
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SECTION 2. 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. PROTECTION OF VULNERABLE ADULTS FROM FINANCIAL |
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EXPLOITATION. 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) "Exploitation," "financial exploitation," and |
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"vulnerable adult" have the meanings assigned by Section 280.001, |
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Finance Code. |
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(3) "Securities professional" means an agent, an |
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investment adviser representative, or a person who serves in a |
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supervisory or compliance capacity for a dealer or investment |
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adviser. |
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B. If a securities professional or a person serving in a |
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legal capacity for a dealer or investment adviser has cause to |
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believe that financial exploitation of a vulnerable adult who is an |
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account holder with the dealer or investment adviser has occurred, |
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is occurring, or has been attempted, the securities professional or |
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person serving in a legal capacity for the dealer or investment |
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adviser shall notify the dealer or investment adviser of the |
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suspected financial exploitation. |
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C. If a dealer or investment adviser is notified of |
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suspected financial exploitation under Subsection B of this section |
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or otherwise has cause to believe that financial exploitation of a |
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vulnerable adult who is an account holder with the dealer or |
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investment adviser has occurred, is occurring, or has been |
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attempted, the dealer or investment adviser shall investigate the |
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suspected financial exploitation and submit a report to the |
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Securities Commissioner, in accordance with rules adopted under |
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Subsection L of this section, and the adult protective services |
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division in accordance with Subchapter B-1, Chapter 48, Human |
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Resources Code. The dealer or investment adviser shall submit the |
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reports required by this subsection not later than the earlier of: |
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(1) the date the dealer or investment adviser |
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completes the investigation; or |
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(2) the fifth business day after the date the dealer or |
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investment adviser is notified of the suspected financial |
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exploitation under Subsection B of this section or otherwise has |
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cause to believe that the suspected financial exploitation has |
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occurred, is occurring, or has been attempted. |
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D. Each dealer and investment adviser shall adopt internal |
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policies, programs, plans, or procedures for the securities |
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professionals or persons serving in a legal capacity for the dealer |
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or investment adviser to make the notification required under |
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Subsection B of this section and for the dealer or investment |
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adviser to conduct the investigations and submit the reports |
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required under Subsection C of this section. The policies, |
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programs, plans, or procedures adopted under this subsection may |
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authorize the dealer or investment adviser to report the suspected |
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financial exploitation to other appropriate agencies and entities |
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in addition to the Securities Commissioner and the adult protective |
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services division, including the attorney general, the Federal |
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Trade Commission, and the appropriate law enforcement agency. |
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E. If a dealer or investment adviser submits reports of |
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suspected financial exploitation of a vulnerable adult to the |
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Securities Commissioner and the adult protective services division |
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under Subsection C of this section, the dealer or investment |
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adviser may at the time the dealer or investment adviser submits the |
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reports also notify a third party reasonably associated with the |
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vulnerable adult of the suspected financial exploitation, unless |
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the dealer or investment adviser suspects the third party of |
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financial exploitation of the vulnerable adult. |
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F. Notwithstanding any other law, if a dealer or investment |
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adviser submits reports of suspected financial exploitation of a |
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vulnerable adult to the Securities Commissioner and the adult |
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protective services division under Subsection C of this section, |
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the dealer or investment adviser: |
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(1) may place a hold on a transaction involving an |
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account of the vulnerable adult; and |
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(2) must place a hold on a transaction involving an |
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account of the vulnerable adult if the hold is requested by the |
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Securities Commissioner, the adult protective services division, |
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or a law enforcement agency. |
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G. Subject to Subsection H of this section, a hold placed on |
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a transaction under Subsection F of this section expires on the 10th |
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business day after the date the dealer or investment adviser |
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submits the reports under Subsection C of this section. |
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H. A dealer or investment adviser may extend a hold placed |
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on a transaction under Subsection F of this section for a period not |
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to exceed 30 business days after the expiration of the period |
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prescribed by Subsection G of this section if requested by a state |
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or federal agency or a law enforcement agency investigating the |
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suspected financial exploitation. The dealer or investment adviser |
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may also petition a court to extend a hold placed on a transaction |
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under Subsection F of this section beyond the period prescribed by |
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Subsection G of this section. A court may enter an order extending |
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or shortening a hold or providing other relief. |
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I. A securities professional or person serving in a legal |
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capacity for a dealer or investment adviser who makes a |
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notification under Subsection B of this section, a dealer or |
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investment adviser that submits a report under Subsection C of this |
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section or makes a notification under Subsection E of this section, |
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or a securities professional or person serving in a legal capacity |
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who or dealer or investment adviser that testifies or otherwise |
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participates in a judicial proceeding arising from a notification |
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or report is immune from any civil or criminal liability arising |
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from the notification, report, testimony, or participation in the |
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judicial proceeding, unless the securities professional, person |
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serving in a legal capacity for the dealer or investment adviser, or |
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dealer or investment adviser acted in bad faith or with a malicious |
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purpose. |
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J. A dealer or investment adviser that in good faith and |
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with the exercise of reasonable care places or does not place a hold |
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on a transaction under Subsection F(1) of this section is immune |
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from civil or criminal liability or disciplinary action resulting |
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from the action or failure to act. |
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K. To the extent permitted by state or federal law, a dealer |
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or investment adviser, on request, shall provide access to or |
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copies of records relevant to the suspected financial exploitation |
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of a vulnerable adult to the Securities Commissioner, the adult |
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protective services division, a law enforcement agency, or a |
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prosecuting attorney's office, either as part of a report to the |
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Securities Commissioner, adult protective services division, law |
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enforcement agency, or prosecuting attorney's office or at the |
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request of the Securities Commissioner, adult protective services |
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division, law enforcement agency, or prosecuting attorney's office |
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in accordance with an investigation. |
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L. The Board by rule shall prescribe the form and content of |
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the report required to be submitted by a dealer or investment |
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adviser to the Securities Commissioner under Subsection C of this |
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section. |
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SECTION 3. 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 and to the extent permitted by law, the |
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executive commissioner by rule may consolidate the form and |
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procedures used to submit a report under Sections 48.051 and |
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48.072. |
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SECTION 4. 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 EXPLOITATION OF VULNERABLE ADULTS |
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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 exploitation," "financial |
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institution," and "vulnerable adult" have the meanings assigned by |
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Section 280.001, Finance Code. |
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(3) "Securities professional" has the meaning |
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assigned by Section 45, The Securities Act (Article 581-45, |
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Vernon's Texas Civil Statutes). |
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Sec. 48.072. CERTAIN REPORTS OF SUSPECTED FINANCIAL |
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EXPLOITATION. (a) The executive commissioner, after consultation |
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with the banking commissioner of Texas, the savings and mortgage |
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lending commissioner, the credit union commissioner, and the |
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securities commissioner, by rule shall prescribe the form and |
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content of the report required to be submitted by a financial |
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institution under Section 280.002(b), Finance Code, and the report |
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required to be submitted by a dealer or investment adviser under |
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Subsection C, Section 45, The Securities Act (Article 581-45, |
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Vernon's Texas Civil Statutes). A report submitted by a financial |
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institution under Section 280.002(b), Finance Code, or a report |
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submitted by a dealer or investment adviser under Subsection C, |
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Section 45, The Securities Act (Article 581-45, Vernon's Texas |
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Civil Statutes), constitutes a report of suspected financial |
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exploitation of a vulnerable adult for purposes of this 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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exploitation of a vulnerable adult described by Subsection (a) |
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includes to the extent possible the same information required to be |
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included in a report under Section 48.051(d). |
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(c) A financial institution that submits a report to the |
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department of suspected financial exploitation of a vulnerable |
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adult under Section 280.002(b), Finance Code, or a dealer or |
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investment adviser that submits a report to the department of |
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suspected financial exploitation of a vulnerable adult under |
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Subsection C, Section 45, The Securities Act (Article 581-45, |
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Vernon's Texas Civil Statutes), in accordance with this section is |
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not required to make an additional report of suspected abuse, |
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neglect, or exploitation under Section 48.051 for the same conduct |
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constituting the financial exploitation reported under this |
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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 exploitation of a vulnerable adult |
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received under Section 280.002(b), Finance Code, or Subsection C, |
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Section 45, The Securities Act (Article 581-45, Vernon's Texas |
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Civil Statutes), that must be similar to the procedures used for the |
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assessment, investigation, and disposition of a report of abuse, |
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neglect, or exploitation received by the department under this |
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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 vulnerable |
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adult 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 exploitation of |
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a vulnerable adult 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 exploitation of a vulnerable |
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adult, the probate court, as defined by Section 22.007, Estates |
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Code, may authorize entry into the place of residence of a |
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vulnerable adult. |
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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 exploitation of a |
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vulnerable adult; or |
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(2) the provision of protective services to a |
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vulnerable adult. |
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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 |
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exploitation of a vulnerable adult under this subchapter; or |
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(2) the provision of protective services, such as |
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removing a vulnerable adult to safer surroundings or safeguarding |
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the vulnerable adult's resources from financial exploitation. |
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Sec. 48.077. MEMORANDUM OF UNDERSTANDING. The commission, |
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the banking commissioner of Texas, the savings and mortgage lending |
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commissioner, the credit union commissioner, the securities |
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commissioner, and the department shall enter into a memorandum of |
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understanding regarding the reporting and investigation of |
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suspected financial exploitation of a vulnerable adult under this |
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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 |
|
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 vulnerable adults 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 5. 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 exploitation of a vulnerable |
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adult made 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 |
|
exploitation of a vulnerable adult made under Subchapter B-1 is |
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governed by Section 48.078. |
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SECTION 6. 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 7. Section 59.006(a), Finance Code, is amended to |
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read as follows: |
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(a) This section provides the exclusive method for |
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compelled discovery of a record of a financial institution relating |
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to one or more customers but does not create a right of privacy in a |
|
record. This section does not apply to and does not require or |
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authorize a financial institution to give a customer notice of: |
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(1) a demand or inquiry from a state or federal |
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government agency authorized by law to conduct an examination of |
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the financial institution; |
|
(2) a record request from a state or federal |
|
government agency or instrumentality under statutory or |
|
administrative authority that provides for, or is accompanied by, a |
|
specific mechanism for discovery and protection of a customer |
|
record of a financial institution, including a record request from |
|
a federal agency subject to the Right to Financial Privacy Act of |
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1978 (12 U.S.C. Section 3401 et seq.), as amended, or from the |
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Internal Revenue Service under Section 1205, Internal Revenue Code |
|
of 1986; |
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(3) a record request from or report to a government |
|
agency arising out of: |
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(A) the investigation or prosecution of a |
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criminal offense; |
|
(B) the investigation of alleged abuse, neglect, |
|
or exploitation of an elderly or disabled person or of alleged |
|
financial exploitation of a vulnerable adult in accordance with |
|
Chapter 48, Human Resources Code; or |
|
(C) the assessment for or provision of |
|
guardianship services under Subchapter E, Chapter 161, Human |
|
Resources Code; |
|
(4) a record request in connection with a garnishment |
|
proceeding in which the financial institution is garnishee and the |
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customer is debtor; |
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(5) a record request by a duly appointed receiver for |
|
the customer; |
|
(6) an investigative demand or inquiry from a state |
|
legislative investigating committee; |
|
(7) an investigative demand or inquiry from the |
|
attorney general of this state as authorized by law other than the |
|
procedural law governing discovery in civil cases; |
|
(8) the voluntary use or disclosure of a record by a |
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financial institution subject to other applicable state or federal |
|
law; or |
|
(9) a record request in connection with an |
|
investigation conducted under Section 1054.151, 1054.152, or |
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1102.001, Estates Code. |
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SECTION 8. This Act takes effect September 1, 2017. |