HF 416 (LSB 1388HH (9) 85)

HOUSE FILE 416

BY  HEDDENS and HEATON

A BILL FOR

An Act establishing provisions to protect the rights of certain individuals, including protections against fraud and financial exploitation, providing for fees and repayment receipts, and providing penalties.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  NEW SECTION.  633B.3  Acknowledgment of fiduciary responsibility —— forms —— registration of power of attorney.
   1.   In order to execute a valid power of attorney in this state, an individual shall complete a power of attorney which includes as part of the power of attorney or as an attachment, an acknowledgment of fiduciary responsibility. The power of attorney shall be signed and notarized. The attorney in fact or agent shall register the completed, signed, and notarized original power of attorney with the secretary of state within ten days of the execution of the power of attorney. Registration of the power of attorney shall be accompanied by a registration fee established by the secretary of state pursuant to subsection 4. 
   2.
  a.  The state court administrator shall develop and approve the content of a power of attorney, including the acknowledgment of fiduciary responsibility, to be used in executing a valid power of attorney. The secretary of state shall make such power of attorney available to the public. A power of attorney from any other source may be used to execute a valid power of attorney if the power of attorney complies with the content requirements developed and approved by the state court administrator.
   b.  The acknowledgment of fiduciary responsibility shall include but is not limited to statements to which the attorney in fact or agent attests that the attorney in fact or agent will do all of the following:
   (1)  Act in accordance with the principal’s reasonable expectations to the extent actually known by the attorney in fact or agent and otherwise in the principal’s best interest.
   (2)  Act in good faith on behalf of the principal.
   (3)  Act only within the scope of the authority granted in the power of attorney.
   (4)  Act loyally for the principal’s benefit.
   (5)  Act so as not to create a conflict of interest that impairs the attorney in fact’s or agent’s ability to act impartially in the principal’s best interest.
   (6)  Act with the care, competence, and diligence ordinarily exercised by an individual in similar circumstances.
   (7)  Keep a record of all receipts, disbursements, and transactions made on behalf of the principal.
   (8)  Cooperate with an individual who has authority to make health care decisions for the principal to carry out the principal’s reasonable expectations to the extent actually known by the attorney in fact or agent and otherwise act in the principal’s best interest.
   (9)  Attempt to preserve the principal’s estate plan, to the extent actually known by the attorney in fact or agent, if preserving the plan is consistent with the principal’s best interest based on all relevant factors.
   c.  Any power of attorney document made available to the public shall be accompanied by information regarding the responsibilities of an attorney in fact or agent, instructions for completion of the power of attorney, and information relating to registration of the power of attorney.
   3.  Upon registration of the power of attorney, the secretary of state shall execute a certified true copy of the power of attorney for filing and shall return the original power of attorney to the attorney in fact or agent. The secretary of state shall provide an additional certified true copy of the registered power of attorney upon request of an attorney in fact or an agent.
   4.  The secretary of state shall establish fees for registration of a power of attorney and for provision of a certified true copy of the power of attorney in reasonable amounts sufficient to offset expenses incurred in the administration of this section. Fees collected shall be treated as repayment receipts as defined in section 8.2 and shall be used for the administration of this section.
   5.  The attorney in fact or agent shall notify the secretary of state if the power of attorney is revoked or upon death of the principal.
   6.  A power of attorney registered under this section shall be maintained as a confidential record. However, the secretary of state shall make available to the public a listing of the names of all principals and respective attorneys in fact or agents.
   7.  This section shall apply to a power of attorney executed on or after January 1, 2014. A power of attorney executed prior to January 1, 2014, is valid as executed and may be registered as executed with the secretary of state as provided under this section.
    Sec. 2.  NEW SECTION.  633B.4  Attorney in fact or agent —— financial exploitation of principal —— prohibitions after death of principal.
   1.  An individual who, while acting as the attorney in fact or agent for a principal under a power of attorney, financially exploited the principal, shall not receive any property, benefit, or other interest following the death of the principal as an heir, distributee, beneficiary, appointee, or in any other capacity whether the property, benefit, or other interest passed under any form of title registration, testamentary or nontestamentary instrument, intestacy, renunciation, or any other circumstance. The property, benefit, or other interest shall pass as if the attorney in fact or agent who financially exploited the principal predeceased the decedent.
   2.  An individual who, while acting as the attorney in fact or agent for a principal under a power of attorney, financially exploited the principal, and who is a named beneficiary of a bond, life insurance policy, or any other contractual arrangement, following the death of the principal is not entitled to any benefit under the bond, policy, or other contractual arrangement, and the benefits become payable as though the attorney in fact or agent had predeceased the decedent.
   3.  For the purposes of this section, “financial exploitation” means the fraudulent or otherwise illegal, unauthorized, or improper act or process by which an attorney in fact or agent takes, appropriates, retains, manages, disposes of, or otherwise uses the funds, property, assets, benefits, or other resources of a principal over which the attorney in fact or agent has power, that results in a monetary or personal benefit, profit, or gain to a person other than the principal to the detriment of the principal, or that results in depriving a principal of rightful access to the principal’s funds, property, assets, benefits, or other resources. 
    Sec. 3.  Section 714.16A, Code 2013, is amended to read as follows:
   714.16A  Additional civil penalty for consumer frauds committed against elderly
 
older individuals —— fund established.
   1.
  a.  If a person violates section 714.16, and the violation is committed against an older person
 
individual, in an action brought by the attorney general, in addition to any other civil penalty, the court may impose an additional civil penalty not to exceed five thousand dollars for each such violation. Additionally, the attorney general may accept a civil penalty as determined by the attorney general in settlement of an investigation of a violation of section 714.16, regardless of whether an action has been filed pursuant to section 714.16.
   b.  A civil penalty imposed by a court or determined and accepted by the attorney general pursuant to this section shall be paid to the treasurer of state, who shall deposit the money in the elderly victim fund, a separate fund created in the state treasury and administered by the attorney general for the investigation and prosecution of frauds against the elderly
 
older individuals. Notwithstanding section 8.33, any balance in the fund on June 30 of any fiscal year shall not revert to the general fund of the state. An award of reimbursement pursuant to section 714.16 has priority over a civil penalty imposed by the court pursuant to this subsection.

   2.  In determining whether to impose a civil penalty under subsection 1, and the amount of any such penalty, the court shall consider the following:
   a.  Whether the defendant’s conduct was in willful disregard of the rights of the older person
 
individual.
   b.  Whether the defendant knew or should have known that the defendant’s conduct was directed to an older person
 
individual.
   c.  Whether the older person
 
individual was substantially more vulnerable to the defendant’s conduct because of age, poor health, infirmity, impaired understanding, restricted mobility, or disability, than other persons.
   d.  Any other factors the court deems appropriate.
   3.  As used in this section, “older person
 
individual” means a person who is sixty-five years of age or older
 
individual as defined in section 231.4.
    Sec. 4.  NEW SECTION.  714.15A  Financial exploitation of an older individual.
   1.  A person who financially exploits an older individual is guilty of the following, as applicable:
   a.  A simple misdemeanor if the value of the resources does not exceed two hundred dollars.
   b.  A serious misdemeanor if the value of the resources exceeds two hundred dollars but does not exceed five hundred dollars.
   c.  An aggravated misdemeanor if the value of the resources exceeds five hundred dollars but does not exceed one thousand dollars.
   d.  A class “D” felony if the value of the resources exceeds one thousand dollars but does not exceed ten thousand dollars.
   e.  A class “C” felony if the value of the resources exceeds ten thousand dollars.
   2.  For the purposes of this section:
   a.  “Financial exploitation” means the fraudulent or otherwise illegal, unauthorized, or improper act or process by which an individual takes, appropriates, retains, manages, disposes, of or otherwise uses the funds, property, assets, benefits, or other resources of an older individual, that results in a monetary or personal benefit, profit, or gain to a person other than the older individual to the detriment of the older individual, or that results in depriving an older individual of rightful access to the older individual’s funds, property, assets, benefits, or other resources. 
   b.  “Older individual” means older individual as defined in section 231.4.
    Sec. 5.  LEGISLATIVE COMMISSION ON ELDER ABUSE PREVENTION.
   1.  The legislative council is requested to establish, within thirty days of the effective date of this Act, a legislative commission on elder abuse prevention to continue the work of the elder abuse task force established pursuant to 2012 Iowa Acts, chapter 1056, and to develop a comprehensive approach to elder abuse prevention and intervention in the state. In addition to legislative members of the commission, the commission shall include representatives of the department on aging, the office of long-term care resident’s advocate, the department of human services, the department of inspections and appeals, the department of public health, the office of the attorney general, the department of veterans affairs, the department of public safety, the insurance division of the department of commerce, a county attorney’s office with experience in prosecuting elder abuse, the superintendent of banking, the courts, and the elder law section of the Iowa state bar association. The commission may form workgroups to address specific elements of elder abuse, and may invite individuals with interest or expertise to participate in the workgroups.
   2.  The legislative commission shall review the report of the elder abuse task force submitted in December 2012, and shall make recommendations to implement the recommendations included in the report, including in regard to all of the following:
   a.  The overall design of the comprehensive approach to elder abuse prevention and intervention in the state. The commission shall consider whether to integrate the approach to elder abuse into the existing dependent adult abuse system pursuant to chapter 235B by utilizing a reporting, investigation, and registry approach or, alternatively, by harmonizing the approach to elder abuse with the dependent adult abuse system by continuing to utilize the prevention of elder abuse program pursuant to section 231.56A and the office of substitute decision maker created pursuant to chapter 231E in addressing elder abuse. The commission shall also determine how to incorporate the approach to elder abuse into other existing and developing entities including the area agencies on aging, the mental health and disability services regions, local public health departments, the local offices of the department of human services, the court system, and other appropriate entities to most effectively and efficiently address the needs of older individuals. The commission shall also address the need for specialized elder abuse units in police departments, the office of attorney general and prosecutors’ offices, and other entities, and whether specialized elder abuse courts should be developed as a mechanism for addressing elder abuse and the needs of older individuals in the court system. The legislative commission shall make recommendations, including the changes in law and rules necessary to implement the recommended approach as determined by the legislative commission.
   b.  The definition of elder abuse to be used in the approach to elder abuse. The legislative commission shall address continued use of the definition of “elder abuse” as specified under the federal Older Americans Act and utilized by the prevention of elder abuse program under section 231.56A, or shall provide a specific alternative definition.
   c.  The designation of a single point of contact to report elder abuse. The legislative commission shall specifically address utilizing the aging and disability resource center network as the single point of contact.
   d.  The means of addressing financial exploitation of older individuals including those relating to powers of attorney and conservatorships as described in the 2012 task force report. The legislative commission shall enlist the involvement of the elder law and probate sections of the Iowa state bar association to review, develop, and submit as proposed legislation for the 2014 legislative session, the uniform power of attorney Act. The legislative commission shall determine whether and what specific crimes should be established to address financial exploitation of older individuals. The legislative commission shall also address whether to establish financial abuse specialist teams (FAST) to provide a concentrated, consistent, and systematic approach to prevent, identify, investigate, and remedy financial exploitation of older individuals and dependent adults.
   e.  Promotion of public awareness of elder abuse and the services and support available to older individuals at risk of or experiencing elder abuse.
   f.  Any specific changes in statute and rules necessary to achieve the recommendations of the legislative commission.
   3.  The legislative commission shall submit a report of its recommendations and proposed legislation to the governor and the general assembly no later than December 15, 2013.
EXPLANATION
   This bill relates to provisions to protect the rights of certain individuals including protections against fraud, and financial exploitation.
   The bill includes a provision relating to powers of attorney. The bill provides that in order to execute a valid power of attorney in the state, an attorney in fact or agent shall complete, sign, and notarize a power of attorney form which includes an acknowledgment of fiduciary responsibilities and register the completed, signed, and notarized original power of attorney with the secretary of state within 10 days of its execution. Registration of the power of attorney is to be accompanied by a registration fee established by the secretary of state. The bill directs the secretary of state to make power of attorney forms, including acknowledgments of fiduciary responsibility developed and approved by the state court administrator available to the public. Other forms that comply with the content developed and approved by the state court administrator may be used to execute a valid power of attorney. The bill specifies the content of the acknowledgment of fiduciary responsibility form and directs that the power of attorney form is to be accompanied by information regarding the responsibilities of the attorney in fact or agent, instructions for completion of the form, and information relating to registration of the form. 
   Upon registration of the power of attorney, the secretary of state is required to execute a certified true copy of the power of attorney for filing and return the original power of attorney form to the attorney in fact or agent. The secretary of state is also required to provide an additional certified true copy of the registered power of attorney upon request of an attorney in fact or an agent. The secretary of state is directed to establish fees for registration of a power of attorney and for provision of a certified true copy of the power of attorney in reasonable amounts sufficient to offset expenses incurred in the administration of the registration of powers of attorney provisions. An attorney in fact or agent is directed to notify the secretary of state if the power of attorney is revoked or upon death of the principal. The power of attorney forms registered are to be maintained as a confidential record, but the secretary of state is to make a listing of the names of all principals and respective attorneys in fact or agents available to the public. The provisions apply to a power of attorney executed on or after January 1, 2014. A power of attorney executed prior to January 1, 2014, is valid as executed and may be registered as executed with the secretary of state as provided under the bill.
   The bill provides that an individual who, while acting as an attorney in fact or agent under a power of attorney, financially exploited the principal, is prohibited from receiving any property, benefit, or other interest following the death of the principal as an heir, distributee, beneficiary, appointee, or in any other capacity whether the property, benefit, or other interest passed under any form of title registration, testamentary or nontestamentary instrument, intestacy, renunciation, or any other circumstance. The property, benefit, or other interest shall pass as if the attorney in fact or agent who financially exploited the principal predeceased the decedent. Additionally, an individual who, while acting as the attorney in fact or agent under a power of attorney, financially exploited the principal, and who is a named beneficiary of a bond, life insurance policy, or any other contractual arrangement, following the death of the principal is prohibited from receiving any benefit under the bond, policy, or other contractual arrangement, and the benefits become payable as though the attorney in fact or agent had predeceased the decedent. The bill defines “financial exploitation” for the purposes of the prohibitions.
   The bill amends existing law relating to consumer frauds perpetrated against the elderly to instead refer to older individuals, consistent with the federal Older Americans Act, as individuals 60 years of age or older. Previously, the victim of a consumer fraud against the elderly was an individual 65 years of age or older.
   The bill establishes the crime of financial exploitation of an older individual. The penalties vary depending upon the value of the resources involved in the crime. The bill defines financial exploitation for the purposes of the crime of financial exploitation of an older individual.
   The bill directs the legislative council to establish a legislative commission on elder abuse prevention within 30 days of the effective date of the bill to continue the work of the elder abuse task force established in 2012 and to develop a comprehensive approach to elder abuse prevention and intervention in the state. The bill specifies the membership of the commission, and provides that the commission may form workgroups to address specific elements of elder abuse, and may invite individuals with interest or expertise to participate in the workgroups. The bill directs the commission to review the report of the elder abuse task force submitted in December 2012, and make recommendations to implement the recommendations included in the report, including those regarding the overall design of the comprehensive approach to elder abuse prevention and intervention in the state; the definition of elder abuse to be used in the comprehensive approach to elder abuse; the designation of a single point of contact to report elder abuse; the means of addressing financial exploitation of older individuals including those relating to powers of attorney and conservatorships, and including the development of draft legislation to enact the uniform power of attorney Act in the 2014 legislative session; promotion of public awareness of elder abuse and the services and support available to older individuals at risk of or experiencing elder abuse; and any specific changes in statute and rules necessary to achieve the recommendations of the legislative commission. The legislative commission is required to submit a report of its recommendations and proposed legislation to the governor and the general assembly no later than December 15, 2013.