BILL ANALYSIS Ó
-----------------------------------------------------------------
|SENATE RULES COMMITTEE | AB 477|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
-----------------------------------------------------------------
THIRD READING
Bill No: AB 477
Author: Chau (D)
Amended: 9/3/13 in Senate
Vote: 21
SENATE HUMAN SERVICES COMMITTEE : 4-2, 6/11/13
AYES: Yee, Evans, Liu, Wright
NOES: Berryhill, Emmerson
SENATE JUDICIARY COMMITTEE : 4-2, 7/2/13
AYES: Corbett, Jackson, Leno, Monning
NOES: Walters, Anderson
NO VOTE RECORDED: Evans
SENATE APPROPRIATIONS COMMITTEE : 5-2, 8/30/13
AYES: De León, Hill, Lara, Padilla, Steinberg
NOES: Walters, Gaines
ASSEMBLY FLOOR : 59-16, 5/9/13 - See last page for vote
SUBJECT : Elder and dependent adult abuse: mandated reporting
SOURCE : California Senior Legislature
DIGEST : This bill, in the Elder Abuse and Dependent Adult
Civil Protection Act (EADACPA), makes a notary public who has
observed or has knowledge of elder or dependent adult financial
abuse, as specified, a mandated reporter of suspected financial
abuse of elders and dependent adults; makes a failure by a
mandated reporter to report suspected financial abuse of an
CONTINUED
AB 477
Page
2
elder or dependent adult subject to civil penalties currently
imposed on other mandated reporters of elder or dependent adult
abuse, and makes such penalties payable by the mandated reporter
to the party bringing the action; adds these new mandated
reporters to the list of other mandated reporters of elder and
dependent adult abuse who are immunized from criminal or civil
liability for any report required or authorized by law and make
other conforming revisions to EADACPA; exempts financial
officers, who are currently mandated reporters under EADACPA,
from the notary public provisions; and revises the
attorney-client privilege provision under EADACPA to provide the
privilege for information protected by the attorney-client
privilege.
ANALYSIS :
Existing law:
1.Establishes the EADACPA, which generally provides civil
protections and remedies for victims of elder and dependent
adult abuse and neglect and specifically requires mandated
reporting by specified entities of elder and dependent adult
physical or financial abuse.
2.Defines "financial abuse" as the taking, secreting,
appropriating, obtaining, or retaining real or personal
property of an elder or dependent adult for a wrongful use or
with intent to defraud, or both or by undue influence, as
defined by Civil Code Section 1575.
3.Provides that any person who has assumed full or intermittent
responsibility for the care or custody of an elder or
dependent adult, whether or not he/she receives compensation,
including administrators, supervisors, and any licensed staff
of a public or private facility that provides care or services
for elder or dependent adults, or any elder or dependent adult
care custodian, health practitioner, clergy member, or
employee of a county adult protective services agency or a
local law enforcement agency, is a mandated reporter of elder
and dependent adult physical or financial abuse.
4.Requires county adult protective services to report, as
specified, instances of reported elder and dependent adult
financial abuse.
CONTINUED
AB 477
Page
3
5.Requires, as part of the Financial Elder Abuse Reporting Act
of 2005, mandated reporting of elder and dependent adult
financial abuse by certain financial institutions, as
specified, and provides civil and criminal penalties for
failing to report elder and dependent adult financial abuse,
as specified.
6.Provides that mandated reporting requirements do not require
an attorney to violate his/her oath and duties pursuant to
attorney-client confidentiality privileges.
7.Provides that reports made by mandated reporters are
confidential and may be disclosed only to specified entities.
A confidentiality violation is a misdemeanor punishable by up
to six months in the county jail, a fine of $500, or both.
8.Provides immunity from civil and criminal prosecution to
mandated reporters of elder or dependent adult financial abuse
and authorizes specified mandated reporters to present a claim
to the California Victim Compensation and Government Claims
Board for reasonable attorney's fees incurred if the mandated
reporter prevails in action made against the mandated reporter
on the basis of making a report required under EADACPA.
9.Requires the county adult protective services to provide
financial abuse instructional materials to mandated reporters.
This bill:
1.Defines "mandated reporter of suspected financial abuse of an
elder or dependent adult" or "mandated reporter" to mean
notaries public.
2.Requires any notary public, who, in connection with providing
notary services, has observed or has knowledge of suspected
financial abuse of an elder or dependent adult, to report the
known or suspected instance of financial abuse by telephone or
through a confidential Internet reporting tool immediately, or
as soon as practicably possible. If reported by telephone,
the notary public must also submit a written or an Internet
report through the confidential Internet reporting tool within
two working days to the local adult protective services agency
or the local law enforcement agency.
CONTINUED
AB 477
Page
4
3.Exempts financial officers, who are currently mandated
reporters under EADACPA, from the notary public mandated
reporting provisions.
4.Provides that when two or more mandated reporters jointly have
knowledge or reasonably suspect that financial abuse of an
elder or a dependent adult for which the report is mandated
has occurred, and when there is an agreement among them, the
telephone report or Internet report may be made by a member of
the reporting team who is selected by mutual agreement. A
single report may be made and signed by the selected member of
the reporting team, and any member of the team who has
knowledge that the member designated to report has failed to
do so will be required to make that report.
5.Requires that if the mandated reporter knows that the elder or
dependent adult resides in a long-term care facility, the
report must be made to the local ombudsman or local law
enforcement agency. This provision only applies when the
notary public knows that the victim of the suspected financial
abuse is an elder or dependent adult.
6.Provides that an allegation by the elder or dependent adult,
or any other person, that financial abuse has occurred is not
sufficient to trigger the reporting requirement if both of the
following conditions are met:
A. The mandated reporter of suspected financial abuse of an
elder or dependent adult is aware of no other corroborating
or independent evidence of the alleged financial abuse of
an elder or dependent adult; however, the mandated reporter
of suspected financial abuse of an elder or dependent adult
is not required to investigate any accusations; and
B. In the exercise of his/her professional judgment, the
mandated reporter of suspected financial abuse of an elder
or dependent adult reasonably believes that financial abuse
of an elder or dependent adult did not occur.
1.Provides that failure to report financial abuse is subject to
a civil penalty up to $1,000, or if the failure to report is
willful, a civil penalty up to $5,000, which must be paid by
the mandated reporter to the party bringing the action.
CONTINUED
AB 477
Page
5
2.Provides that the civil penalty can be recovered only in a
civil action brought against the mandated reporter by the
Attorney General, district attorney, or county counsel; no
action can be brought by any person other than the Attorney
General, district attorney, or county counsel, and multiple
actions for the civil penalty cannot be brought for the same
violation.
3.Defines "suspected financial abuse of an elder or dependent
adult" to mean when a person who is required to report
observes or has knowledge of behavior or unusual circumstances
or transactions, or a pattern of behavior or unusual
circumstances or transactions, that would lead an individual
with like training or experience, based on the same facts, to
form a reasonable belief that an elder or dependent adult is
the victim of financial abuse.
4.Makes reports of suspected financial abuse of an elder or
dependent adult made by a mandated reporter a privileged
publication not subject to a defamation action.
5.Clarifies that the attorney-client privilege is not solely
applicable to attorneys but rather applies to the information
that would otherwise be required to be reported.
6.Adds these new mandated reporters to the list of other
mandated reporters of elder and dependent adult abuse who are
immunized from criminal or civil liability for any report
required or authorized by law and makes other conforming
revisions.
Prior Legislation
SB 718 (Vargas, Chapter 373, Statutes of 2011) authorized a
mandated reporter to submit a report of suspected elder and
dependent adult abuse through the use of a confidential Internet
reporting tool.
SB 33 (Simitian, Chapter 372, Statutes of 2011) removed the
sunset date of the Financial Elder Abuse Report Act of 2005.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
CONTINUED
AB 477
Page
6
According to the Senate Appropriations Committee:
Non-reimbursable local enforcement costs offset to a degree by
fine revenue to the extent the expansion of mandated reporting
requirements to notaries public results in additional
violations for failure to report or for misdemeanor violations
of the confidentiality provisions of mandated reports.
Unknown; potential increase in future state General Fund
appropriations likely less than $50,000 per year to the extent
the expansion of eligibility for reimbursement of attorney's
fees through the VCGCB to notaries public results in
additional claims submitted and paid. Minor, absorbable
administrative workload impact on the VCGCB to process
additional claims.
Potential state costs in excess of $50,000 (General Fund) for
mandating additional duties on county APS agencies to report
to law enforcement and public agencies, as well as provide
information to notaries public. Funding for APS was realigned
to the counties under 2011 Public Safety Realignment. Any new
duties would not be subject to reimbursement through the state
mandate reimbursement process but instead could require a
subvention of state funds pursuant to the provisions of
Proposition 30 (November 2012).
Ongoing costs to the Judicial Branch, potentially in the range
of $25,000 to $50,000 (Trial Court Trust Fund) for additional
misdemeanor and felony court filings.
Potential ongoing increased local and state incarceration
costs in excess of $100,000 statewide to the extent the
provisions of this bill result in a significant increase in
reports to law enforcement and subsequent prosecutions.
SUPPORT : (Verified 9/3/13)
California Senior Legislature (source)
AARP California
AFSCME
Alzheimer's Association
California Association for Health Services at Home
California Association of Legal Documents Assistants
CONTINUED
AB 477
Page
7
California Commission on Aging
California Long-Term Care Ombudsman Association
California Police Chief Association, Inc.
Consumer Attorneys of California
Consumer Federation of California
County Welfare Directors Association of California
OPPOSITION : (Verified 9/3/13)
Escrow Institute of California
ARGUMENTS IN SUPPORT : According to the author:
AB 477 helps protect California seniors by making notaries
public mandated reporters of financial abuse of an elder or
dependent adult.
Financial elder abuse has increased in California and will
continue to do so with its growing aging population.
California has the largest population of older Americans in
the United States, with the U.S. Census Bureau projecting
the elderly population growing from 3.7 million to 6.4
million over the next 20 years. These projections coupled
with the baby boomer's financial strength, set the
groundwork for potential financial elder abuse.
The EADACPA currently requires certain parties and
institutions, known as mandated reporters, to report known
or suspected financial abuse of an elder or dependent adult
by telephone or through a confidential internet reporting
tool immediately, or as soon as practically possible.
In turn, notaries play a key role in lending integrity to
important transactions of commerce and law through the
verification of signatures and of legal transactions.
Again, their exposure to a wide array of legal documents
places them in a key position to recognize potential
instances of financial elder or dependent adult abuse. AB
477 further protects California seniors by making notaries
public mandated reporters of financial abuse of an elder or
dependent adult.
ARGUMENTS IN OPPOSITION : The California Escrow Association
(CEA) and California Land Title Association (CLTA), raise
CONTINUED
AB 477
Page
8
numerous concerns that would apply to all notaries public, not
just those employed by escrow companies or title insurers.
Notably, the National Notary Association has not raised any
similar concerns. Yet, the reasoning behind the concerns raised
by CEA and CLTA centers on why notaries public who provide
escrow or sub-escrow services in a real property transaction
should be excluded from this bill. The reasons asserted by CEA
and CLTA for excluding these notaries are as follows:
1.Forcing notaries to "second guess" or refuse to notarize
documents could have a huge and unintended impact on real
estate transactions : Despite the opportunity for financial
redress included in the most recent version of the bill, this
does not consider the very real and significant financial
implications of a notarial act refused or improperly reported
that results in the delay of the closing of a real estate
transaction out of an abundance of caution.
The financial downside of a transaction lost because of notary
concerns or reporting is not adequately addressed in the bill,
and does not take into account that the interests other
parties (sellers, buyers, real estate brokers, lenders, and
others) that could be significantly negatively impacted.
2.Escrow and title company notaries should be exempted from the
bill : Notaries who are escrow holders and title insurers and
title insurers who act in a neutral transactional capacity
should be exempt. Most of the fraud noted by proponents is
likely attributed to documents such as powers of attorney,
executed outside of a transaction and without the benefit of
counsel, whether that transaction is estate planning by an
attorney, or a bona fide transaction such as the sale of
property.
ASSEMBLY FLOOR : 59-16, 5/9/13
AYES: Achadjian, Alejo, Ammiano, Atkins, Bigelow, Bloom,
Blumenfield, Bocanegra, Bonilla, Bonta, Bradford, Brown,
Buchanan, Ian Calderon, Campos, Chau, Chesbro, Cooley, Daly,
Dickinson, Eggman, Fong, Fox, Frazier, Garcia, Gatto, Gomez,
Gordon, Gorell, Gray, Grove, Hall, Roger Hernández,
Jones-Sawyer, Levine, Lowenthal, Maienschein, Medina,
Melendez, Mitchell, Mullin, Muratsuchi, Nazarian, Perea, V.
Manuel Pérez, Quirk, Quirk-Silva, Rendon, Salas, Skinner,
Stone, Ting, Torres, Weber, Wieckowski, Wilk, Williams,
CONTINUED
AB 477
Page
9
Yamada, John A. Pérez
NOES: Allen, Chávez, Conway, Dahle, Donnelly, Beth Gaines,
Hagman, Harkey, Jones, Linder, Mansoor, Morrell, Nestande,
Olsen, Patterson, Wagner
NO VOTE RECORDED: Holden, Logue, Pan, Waldron, Vacancy
JL:ej 9/3/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****
CONTINUED