Saturday, July 13, 2024

June 2007 Legal Briefs

Changes to Oklahoma’s Vulnerable Adult Abuse Reporting Provisions

  1. Financial Neglect; Exploitation
  2. Specific Duty to Report
  3. Avoiding Singling out Banks 
  4. Expanded DHS Powers

Illegal Immigration: How H.B. 1804 Affects Banks, Other Businesses

  1. Citizenship/Immigrant Verification
  2. Independent Contractor Verification
  3. “Harboring” Illegal Immigrants
  4. Restriction on Issuing ID’s
  5. Other Provisions
  6. Economic Costs

Changes to Oklahoma’s Vulnerable Adult Abuse Reporting Provisions

Oklahoma Senate Bill 398, effective November 1, 2007, amends provisions requiring reports to the DHS concerning suspected abuse (including certain types of financial abuse) of vulnerable adults (the elderly or disabled). 

Revised language in Title 43A, O.S., Section 1-103 creates a new category of reportable abuse–“financial neglect.”  This new category will be helpful for banks and others, because (unlike prior law) it does not depend on whether the person controlling the finances is deliberately exploiting the victim.  (The existing “exploitation” standard in the same statute will continue as a basis for reporting to the DHS.  Now we will have both that test and the “financial neglect” test as grounds for reporting financial abuse.)

Under the new “financial neglect” standard, reporting to the DHS is required either (1) when a vulnerable adult’s money is apparently being squandered or mismanaged by someone else, or (2) when someone managing the vulnerable adult’s finances is not paying for necessary bills or utilities in a timely manner.

This year’s amendments also add to the categories of persons who are specifically required to report to the DHS regarding abuse (including financial abuse) of a vulnerable adult.  The broadest new category of persons required to report to DHS (and the only financially-related category) is “persons entering into transactions” with someone who is handling a vulnerable adult’s finances.  All providers of goods or services, when dealing with someone managing the finances of a vulnerable adult, must report suspected financial abuse to the DHS. 

(Banks will be included in this new category of persons specifically required to report to the DHS, but only because all businesses (including banks) will have a basic duty to report.) 

I will discuss below each of Senate Bill 398’s specific statutory changes relating to abuse of vulnerable (elderly or disabled) adults.  

1. Financial Neglect; Exploitation

For a long time it has been a felony (Title 21, O.S., Section 843.1) for a “caretaker” to “abuse, neglect or exploit” someone (adult or child) under that person’s care.  Over time, this statute (which originally related to physical care in nursing homes, or home care by a relative) was broadened in various ways:  (1) “caretaker” was changed to include anyone, (2) “sexual abuse” was added to the list of offenses, and (3) “exploit” was re-defined to include financial exploitation, cross-referencing Title 43A, O.S., Section 10-103(A)(9). 

Later, “caretaker” was further expanded (in Section 10-103(A)(6)) to include someone taking over financial management for a vulnerable adult—not necessarily physical care.)  Since 1998 the criminal statute (Section 843.1) has covered even a purely financial “caretaker” engaging in “financial exploitation.” 

This year the list of offenses in the criminal statute has been broadened again, to include “financial neglect” by someone handling a vulnerable adult’s resources.

The statute that requires reporting to the DHS (separate from the criminal statute) is Title 43A, O.S., Section 10-104.  (It allows reporting to either (1) the DHS, (2) the local police, or (2) the local sheriff’s office.  These entities will share information with each other, as appropriate, based on who has expertise or jurisdiction to investigate the particular problem, bring charges, etc.  To simplify the discussion I will just refer to “reporting to the DHS.”)

Both the reporting statute (Section 10-104) and the criminal statute (Section 843.1) use definitions of “abuse,” “neglect” and “exploitation,” as found in Section 10-103—so there is quite a bit of overlap between the two statutes, although they’re not identical in coverage.

 Section 10-104 requires prompt notice to the DHS when “any person” has “reasonable cause to believe that a vulnerable adult [elderly or disabled] is suffering from abuse, neglect, or exploitation . . .” This is the statute that has required anyone (including banks) to make reports to the DHS. 

Although Section 843.1 was specifically amended this year to include the new term, “financial neglect,” Section 10-104 was not amended to add this phrase.  Nevertheless, because of the close relationship between Section 843.1 and Section 10-104 and the related definitions in Section 10-103, a reasonable interpretation would be that “financial neglect” as newly defined in Section 10-103 and as specifically added in Section 843.1, can now be considered a subcategory of “neglect” that Section 10-104 requires “any person” to report to the DHS.  

Following is the definition of “financial neglect” added this year in Section 10-103:

“‘Financial neglect’ means repeated instances by a caretaker, or other person, who has assumed the role of financial management, of failure to use the resources available to restore or maintain the health and physical well-being of a vulnerable adult, including, but not limited to:  a. squandering or negligently mismanaging the money, property, or accounts of a vulnerable adult,  b. refusing to pay for necessities or utilities in a timely manner, or c. providing substandard care to a vulnerable adult despite the availability of adequate financial resources . . .”

The “financial neglect” standard allows a bank (or others) to report to the DHS based simply on the observable bad impact on the victim—and does not require evidence that the person managing the money is benefiting personally, has bad intent, or is using any kind of trickery.

Several additional points should be emphasized here.  First, the definition doesn’t apply to just one questionable transaction.  There need to be “repeated instances”–a pattern of activity or a pattern of failing to act.  Someone viewing a situation from an isolated perspective may not be aware of multiple instances, and wouldn’t have enough information to be able to report “financial abuse.” Second, this standard does not fault someone for spending less than what is needed, if that’s as far as the money will stretch. Third, a person managing funds for a vulnerable adult is expected to pay for “necessities or utilities”—such as food, medications, and clothing—but won’t violate this test by failing to pay bills unrelated to “health and physical well-being,” such as loan payments.

If a bank or other person notices an unusual or questionable check but the new “financial neglect” test technically is not satisfied, that person should also consider whether financial “exploitation” might apply (as defined in Section 10-103), because that continues as a separate grounds for reporting to the DHS under Section 10-104.

The test of financial “exploitation” of a vulnerable adult in Section 10-103(A)(9) requires both (1) an “unjust or improper use of the resources” of the vulnerable adult for “the profit or advantage” of someone other than that adult, and also (2) some level of wrongful tactics used to achieve that result (including “undue influence, coercion, harassment, duress, deception, false representation or false pretense”).

If a situation “just doesn’t look right,” it’s appropriate to consider whether it meets the definition of either “financial neglect” or “financial exploitation.” If neither test is satisfied, there is no duty to report the situation to the DHS.  However, a bank can still file a SAR (on an optional basis, even if not required) when it believes or reasonably suspects that a criminal violation of any other kind is occurring.  After a bank files a SAR, it is then permitted by federal law to provide a copy of that SAR to law enforcement, without liability for doing so.

2. Specific Duty to Report

Section 10-104 is unusual in how it states who must report to the DHS.  On the one hand, it creates a general duty for “any person” to report “abuse, neglect, or exploitation.”  Everyone is covered by this duty, no matter what groups are listed later.  Next, the statute goes beyond the general duty, listing certain groups with a specific duty to report.

Prior to this year’s changes, Section 10-104 listed the following groups as having a specific duty to report “abuse, neglect or exploitation” to the DHS:  (1) physicians; (2) ambulance drivers and other medical professionals; (3) social workers and mental health professionals; (4) law enforcement officials; (5) staff of domestic violence programs; (6) long-term care facility personnel; and (7) other health care professionals.  Except for law enforcement officials, all of these groups typically encounter instances of physical or emotional abuse–not financial abuse.

In addition to the groups already listed, this year’s statute adds some new groups with a specific duty to report abuse to the DHS: (1) “staff of nursing facilities, intermediate care facilities for persons with mental retardation, assisted living facilities, and residential care facilities” (expanding the previous category of “long-term care facility personnel”);  (2) “staff of residential care facilities, group homes, or employment settings for individuals with developmental disabilities”; and (3) “job coaches, community service workers, and personal care assistants.”  These newly-added groups mostly provide services to disabled adults or persons starting to become physically or mentally impaired.  These new groups do not regularly see financial abuse, and will not normally be reporting such abuse.

Starting in 2000 there have been three separate attempts by the DHS (including this year) to add “financial institutions” to the categories of persons specifically required to report to the DHS concerning abuse of vulnerable adults. Each time, the OBA has opposed this change.  

This year, instead of the DHS proposal to add “financial institutions” to the groups specifically required to report, the OBA proposed the following group—and it was added to Section 10-104’s list of those with a specific duty to report suspected abuse to the DHS:  “Persons entering into transactions with a [financial] caretaker or other person who has assumed the role of financial management for a vulnerable adult . . .” 

(Here, the definition of “caretaker” includes a trustee or guardian–someone formally appointed to manage a vulnerable adult’s money–but also includes someone with a much more informal role, such as a relative or friend who steps in to assist in buying necessary items, paying bills, etc.)

Banks will be part of the newly added, much larger group that is specifically required to report to the DHS (“persons entering into transactions with a caretaker or other person”).  However, this provision has no greater responsibility for financial institutions than for merchants and service providers generally, because all are part of the same general group.  

Based on this newly added language, the payee on the check (a “person entering into transactions with a [financial] caretaker”) becomes the first line of defense, required to report financial abuse to the DHS.  Merchants or service providers dealing directly with the person spending the funds will have responsibility to report to the DHS when they suspect abuse.

3. Avoiding Singling out Banks  

DHS apparently views “financial institutions” as the logical “policeman” for improper financial transactions regarding vulnerable adults.  However, in most cases banks are simply processors of checks, not payees.  Banks often are completely unaware of the nature or details of the underlying transaction that a customer’s check or electronic item pays for. 

Most checks are presented for payment either (1) as part of a merchant’s deposit, or (2) through the bank’s cash letter.  In these situations, the bank has no communication with the payee concerning the specific check, and only rarely communicates about the particular item with either the accountholder or (if there is an authorized signer) another person who is the writer of the check.  Usually a bank can only guess concerning whether the particular transaction that a check represents is appropriate.  Nor is it workable for a bank to attempt to call customers to verify their intentions, except in the most unusual situations.

With “bulk filing,” any attempt to give banks a “policeman” role for items paid on a customer’s account is seriously out of touch with reality.  Under “bulk filing,” a bank does not individually examine the customer’s checks—except for items above a certain dollar amount, or items that overdraw the account enough to be returned.  

A payee on a check usually deals face-to-face with the person who is paying for goods or services.  Even when a transaction is not carried out face-to-face, a payee is often in a better position than the paying bank to understand the transaction, and may be able to inquire into the circumstances if something is unusual.

Because of the more general introductory language in the statute (requiring any “person engaging in transactions with a [financial] caretaker” to report abuse), financial institutions already have a reporting requirement (like everyone else), and arguably this year’s changes do not increase that requirement beyond what banks are already expected to do.

The statute (as amended by this year’s changes) still does not mention “financial institutions” at all.  Hopefully this will continue to help to prevent banks from becoming targets of lawsuits regarding transactions that allegedly should have been noticed, or should have been reported.  It remains possible to argue that a bank has a less-emphasized, more ambiguous reporting duty, compared to other groups specifically named in the statute. 

4.  Expanded DHS Powers

When the DHS determines that a vulnerable adult “is suffering from abuse, neglect or exploitation presenting a substantial risk of death or immediate and serious physical harm to the person or financial exploitation” (Title 43A, O.S., Section 10-108), the DHS can go to court to seek any of the following–involuntary protective services; appointment of a temporary guardian; freezing of the assets; suspension or revocation of the authority granted by a power of attorney; or termination of a guardianship.  In a DHS-related case, a judge’s order authorizing any of these things might affect a deposit account.

This year’s amendments to Section 10-108 add some new powers that the judge may grant to the DHS in the “involuntary protective services” scenario.  One of these, in Section 10-108(F)(2)(d), will allow the DHS (by court order) to sell personal property of a vulnerable adult (anything other than real estate) in order to pay for necessary care–for example, when the person’s available assets are not liquid.  

In some situations a vulnerable adult may own vehicles, an RV, a boat, farm equipment, etc. The vulnerable adult’s physical or mental condition may no longer allow him to use these tangible assets.  Turning the assets to cash can be a logical way to provide necessary funds—and particularly if there is financial abuse, because other funds may already be gone.  Of course, if a bank has a loan on collateral that gets sold by the DHS, the bank’s lien or security interest will remain effective. 

In the “involuntary protective services” scenario, another amendment to Section 10-108 will allow the court to order “the eviction of persons who are in a position to exploit the vulnerable adult from any property owned, leased, or rented by the vulnerable adult and restriction of those persons’ further access to any property of the vulnerable adult.”  In other words, the DHS can get a restraining order to keep the alleged perpetrator away from the victim.

In one situation, an elderly person was feeble enough to be substantially confined to his home.  Relatives would come to visit, run errands, and otherwise assist with his care.  One younger relative stole some of his checks and forged them.  Another relative helped to get the old account closed and a new account opened.  The same perpetrator continued to visit the elderly person, stole some checks on the new account, and forged those also. 

At this point the bank recognized that opening up a second new account would solve nothing. The elderly person needed care and appreciated visitors, so there was no effective way to guard the accountholder’s checks and financial records from the perpetrator.  After taking losses on two accounts, the bank reluctantly decided that it needed to refuse to open another account.

In this same scenario, the new provision will normally allow the DHS to obtain a restraining order, keeping the younger relative off the elderly person’s property, and away from checks or other assets that might be stolen.  (A restraining order is much faster and requires a lower level of proof than obtaining a criminal conviction against the younger relative, for example.) 

Illegal Immigration: How H.B. 1804 Affects Banks, Other Businesses

  The “Oklahoma Taxpayer and Citizen Protection Act of 2007” (House Bill 1804) has been described as the strongest “anti-illegal-immigration” statute passed by any state.  It takes effect on November 1.

The bill will have little direct impact on banks.  (Banks don’t hire illegal immigrants, because of required background checks, etc.)  However, most banks have some commercial loan customers who could see significant financial impact.

For any company to make money and service its debt, it needs a sustainable approach to operating its business.  If the way a company has operated in the past (such as by hiring illegal immigrants) is no longer viable because of tighter laws and increased risks, lenders should be concerned.  

Some people expect Oklahoma’s “illegal immigration” bill to be challenged in the courts.  It’s possible that a court will be asked to “stay” the bill’s effective date; but I think any “stay” (if granted) would probably cover only part of the bill’s rather broad collection of provisions.  In other words, at least some of the bill’s sections will probably go into effect normally on November 1. Therefore, it’s appropriate to understand this bill’s provisions and to plan for compliance.  Some of the bill’s more controversial provisions might be blocked by a court; but it’s prudent to consider what the full implementation of the bill would require for a specific business.

In the current legislative environment, the lesson for employers who hire illegal immigrants should be that (1) the political climate has permanently changed, and (2) it’s necessary to focus on compliance with immigration-related laws to avoid serious business risks. 

Noncompliance with H.B. 1804’s provisions could wipe out the profits of some companies, and put others out of business—depending on the specific circumstances.  Certainly, Oklahoma lacks enough law enforcement personnel to enforce all of the provisions of H.B. 1804 against everyone—but it’s only logical to assume that H.B. 1804 will be enforced in at least some cases—particularly for flagrant violations, and elsewhere on at least a random basis. A lender doesn’t want its borrower to be the particular company that is caught and made an example.  Banks may need to require their commercial borrowers to comply with the provisions of H.B. 1804—which turns the bill into the bank’s enforcement problem.

I will review most of H.B. 1804’s provisions, with particular emphasis on the possible impact on businesses.

1.  Citizenship/Immigrant Verification

A new statute (Title 25, O.S., Section 1313) will require “every public employer” (meaning “every department, agency, or instrumentality” of the State, or any county, city or school district in Oklahoma) to register with and utilize a “Status Verification System.”  (The registration requirement is effective November 1, but consequences start only after July 1, 2008.)  

A “Status Verification System” is (1) an electronic verification system operated by the federal government to allow verification or ascertaining of the citizenship or immigration status of individuals (known as the “Basic Pilot Program”), or (2) an equivalent federal program to verify work-eligibility status of newly hired employees.

H.B. 1804 does not specifically require private employers (businesses and individuals) to use a Status Verification System.  However, as explained below, businesses in Oklahoma must use this system to be protected from liability.

Section 1313(C) makes it a “discriminatory practice” (job discrimination) if any employer (apparently either a private or public employer) retains on its payroll an unauthorized alien who is hired after July 1, 2008, while that employer at the same time fires any employee who is a U.S. citizen or permanent resident alien “working in Oklahoma in a job category that requires equal skill, effort, and responsibility . . . performed under similar working conditions . . .”

Assume an employer has two employees performing essentially the same job.  One is an illegal immigrant hired after July 1, 2008 (whether the employer knows this or not), while the other is a U.S. citizen.  If the employer fires the citizen (such as for bad job performance), while keeping on the payroll the illegal immigrant hired after July 1, 2008, the citizen can sue for discrimination. 

Here’s how an employer can protect itself:  If the employer enrolls in and uses a Status Verification System to verify that a person hired after July 1, 2008, is legally eligible for hire, this creates a “safe harbor.”  If the information obtained from this system does not indicate that the individual is present in the U.S. illegally, the employer can hire that person, and cannot be investigated or sued under H.B. 1804’s provisions for doing so.

Employers will basically be financially forced (although not legally forced) to use the Status Verification System; and use of the system will cause them to learn the truth about a new job applicant’s immigration status.  (It no longer will work to just “not ask questions,” so that it’s possible later to say, “I didn’t know this person was illegal.” If the employer uses the verification system, determines that someone is illegal, but hires him anyway, the liability will be too great.  Failing to use the system will also create liability that is too great.

The intent of the bill is that after July 1, 2008, the hiring of illegal immigrants in Oklahoma will come to a grinding halt.  (The law affects “new hires” after July 1, 2008, but does not (by itself) interfere with pre-existing employment relationships.  It’s quite possible that an illegal immigrant who held a job before July 1, 2008, could retain that job without further investigation; but he could not move to another job (where his status would need to be verified). Illegal immigrants moving to Oklahoma after July 1, 2008, or those changing jobs, will have extreme difficulty finding work—if the law is followed strictly.

The same section prohibits public entities (state, city, county, schools) from entering into any “contract for the physical performance of services within this state” after July 1, 2008, unless the contractor registers with and participates in the Status Verification System.  (All bidding on public projects will be affected—everything from constructing a new building, to janitorial services.)  A contractor making any public bid must verify the employment eligibility of new hires after July 1, 2008, in order to qualify to do work for public entities.  (This does not affect contracts in place before July 1, 2008.)

For private employers who already have a significant number of illegal immigrants in their employment base or in their contractor network (construction trades, manufacturing, automotive services, lawn care, janitorial, etc.), H.B. 1804’s requirement to hire only “legal” workers after July 1, 2008, could increase expenses substantially.  For example, a company might have to pay higher wages to attract “legal” workers with similar skills, or might have to pay a higher contract price to an independent contractor who is faced with the same situation.  (Higher expenses reduce an employer’s profits or force the employer to raise his own charges–possibly resulting in some loss of business).  Alternatively, if there aren’t enough “legal” workers available locally with therequired skills or willingness to work at a particular job, some employers may be forced to reduce their scale of operations, in spite of demand. 

2.  Independent Contractor Verification

Private companies (and individuals) are not specifically prohibited from dealing with illegal immigrants as independent contractors, but will face state tax liability if they pay at least $600 in one year to an independent contractor (for “physical performance of services”) and the person receiving the money is not “legal” (and not filing taxes).  Individuals often obtain home or car repairs, or lawn care, by seeking out the cheapest labor and perhaps taking a “no skin off my back” approach to that individual’s immigration status; but that will no longer work.  (An IRS form 1099-MISC is also required to be filed, by federal tax laws, at the $600 level.  This is hard to do if the person who pays the money is unable to obtain an SSN or ITIN from the illegal immigrant.)

In the specific section that is added to Oklahoma’s tax provisions (Title 68, O.S., Section 2385.32), when an independent contractor does not provide proof of “employment authorization,” the person hiring that contractor must withhold state income tax from the contract payments at the top Oklahoma income tax rate.  A “legal” contractor will have every incentive to document his legal status, to avoid having tax deducted from the contract price. (The person required to withhold the income tax from the contract price must remit the tax to the Tax Commission.)

The same statute creates a financial penalty for someone who not only hires a contractor without obtaining “employment authorization” but also fails to withhold Oklahoma income tax:  The person hiring the contractor is liable for payment of the tax, at the maximum rate, if it wasn’t withheld.

A construction-industry contractor working almost entirely through subcontractors could (1) fail to obtain documentation from subcontractors, and also (2) fail to withhold Oklahoma income tax on payments made to contractors.  He could be liable for enough tax on several jobs combined to put him out of business.  A consumer who is his own general contractor can have similar issues.

3. “Harboring” Illegal Immigrants

Another new section of law (Title 21, O.S., Section 446) makes it illegal to “transport” or to “harbor” any alien who is in the U.S. illegally.  Following is the specific “harboring” language:  “It shall be unlawful for any person to conceal, harbor, or shelter from detection any alien in any place within the State of Oklahoma, including any building or means of transportation, knowing or in reckless disregard of the fact that the alien has come to, entered, or remained in the United States in violation of law.”  This offense is a felony, punishable by not less than one year in prison, or a fine of not less than $1,000, or both.  

The “average man on the street,” when recognizing the possibility of either prosecution for a felony, or a fine (although neither of these may be a very real threat in the absence of other wrongdoing) could “back away” from dealing with illegal immigrants on any basis, where before such person had no hesitation in doing so.  (Many illegal immigrants already live in a secretive, self-contained world, and this statute may increase that isolation.)

Realistically, local district attorneys are not going to attempt to fill the jails by charging well-meaning first-time offenders with harboring an illegal immigrant.  (A district attorney’s office has limited resources and must prioritize what charges to file and prosecute.)  Occasionally, someone’s involvement with illegal immigrants may be bad enough to earn some jail time, but probably only because of a combination of criminal charges that all apply.  

To meet the statute’s definition of “harboring,” someone must harbor an alien either (a) knowingly or (b) “in reckless disregard” that the alien is in the U.S. illegally.  As an interesting example, how far would a landlord (a bank’s borrower) have to go to satisfy the statute?  A landlord would probably have good reason to suspect someone is “illegal” if that person can’t speak English, and has no car, household goods, bank account, Social Security number, rental references, personal references, or employer’s name or phone number.  Such circumstances raise lots of “red flags.” If a landlord can’t get answers to questions like this and doesn’t even care (or never asks), there may be “reckless disregard” of the tenant’s immigration status. You might call it “willful blindness.”

Should a lender be disturbed if a landlord takes this type of approach to renting? If a lender suspects that a rental property borrower is openly renting to and targeting illegal immigrants, the “harboring” provision potentially exposes the borrower to a felony charge or penalty, which in turn could seriously impact the borrower’s ability to continue to pay the loan as agreed.  The possibility is there—but serious consequences are probably not likely, at least the first time.

A lender certainly cannot “redline” or discriminate based on either (1) the nationality or racial identity of the borrower or the tenants, or (2) the fact that a particular neighborhood in which a property is located is thought to be heavily occupied by illegal immigrants.  It is probably legitimate to counsel with borrowers (both commercial and income-property borrowers) to make sure they are aware of the various provisions of the new law and the legal traps involved in not complying.  I think it is also probably acceptable (if a lender sees any advantage) to insert in commercial loan agreements and in income-property mortgage loans a covenant that the borrower will operate the business (or the property) only in compliance with all applicable laws.  

4.  Restriction on Issuing ID’s

Title 21, O.S., Section 1550.42, will prohibit federal, state and local government agencies, and also all public or private schools or educational institutions, from issuing “identification documents,” except to U.S. citizens, nationals and legal permanent resident aliens. 

In the case of schools and educational institutions, the restriction applies to ID’s for “any administrator, faculty member, student or employee,” although for these institutions such an ID can be issued without checking citizenship/immigration status if the ID “is only valid for use on the campus or facility of that educational institution and includes a statement of such restricted validity clearly and conspicuously printed upon the face of the identification document.” 

Apparently, a “school ID” issued with restrictive language will not be usable as secondary identification for CIP purposes, and cannot be used to obtain a driver’s license, voter registration, etc.  In the case of children who are minors and are not yet old enough to have a driver’s license, a birth certificate (or other appropriate government-issued ID) will probably be required for identification purposes.  (Obtaining a first-time driver’s license will perhaps become a lengthier process.  Delays also may result at the Health Department because of increased numbers of people needing copies of birth certificates.)

State, county and city governments won’t be allowed to issue a voter identification card, driver’s license, or non-driver ID card, nor even an identification card for their own employees, without first determining that the individual is a U.S. citizen, national, or legal permanent alien. Exceptions apply (although the person must present valid documentary evidence) if the person (1) has a valid, unexpired immigrant or nonimmigrant visa; (2) has a pending or approved application for asylum in the U.S.; (3) has been admitted to the U.S. as a refugee; (4) has a pending or approved application for temporary protected status in the U.S.; (5) has approved deferred action status; or (6) has a pending application for adjustment of status to legal permanent resident status or conditional resident status. 

In each of the exceptions just listed, the government-issued identification document (such as a driver’s license) must be issued to expire not later then the expiration of the person’s status (for example, to coincide with the expiration of a visa); or if the documentation presented has no expiration date, the identification document (such as a driver’s license) must be issued for no more than one year at a time, and any renewal shall be granted only upon submitting valid documentation of continued legal presence in the U.S. 

Importantly, any previously-issued identification document (voter I.D. card, driver’s license, etc.) will be presumed valid after the bill takes effect.  Apparently, later renewals of ID’s issued before the bill’s effective date will normally not require documentation, either; but documentation will be required at renewal if the Department of Public Safety has been notified by a local, state or government agency that the person may be present in the U.S. illegally. 

5.  Other Provisions

H.B. 1804 contains several other provisions that may have a significant impact on illegal immigrants, but not on businesses.

A new statute (Title 56, O.S., Section 71) will require every state or local agency to verify the lawful presence in the U.S. of any person 14 years or older who is applying for either (1) state or local benefits, or (2) federal benefits administered by the state or local agency.  Exceptions exist for emergency medical conditions; short-term non-cash emergency disaster relief; immunizations for diseases; and soup kitchens, crisis counseling, and short-term shelters.  The statute prohibits focusing just on persons who look like they might be illegal.  As a result, everyone must be verified.

The first step in each agency’s verification process is to obtain from the individual “an affidavit under penalty of perjury” that he or she is a U.S. citizen or is living in the U.S. legally. The affidavit alone is enough to apply for the benefits, but in a second step the agency must follow up by verifying the person’s eligibility through the federal Systematic Alien Verification for Entitlements (SAVE) Program.  Falsely signing the affidavit is subject to criminal penalties, and the agency must file a complaint against the person with the U.S. Attorney General.

The specific benefits that require legal presence in the U.S. are those listed in 8 U.S.C., Sections 1611 or 1621.  Generally, the list includes federal, state or local grant money; loan programs; retirement benefits; welfare; assisted housing; post-secondary education benefits; and unemployment benefits. Professional or commercial licenses (such as medical or law licenses, local contractor licenses, etc.) cannot be granted by a state, city, etc., without the required affidavit. Various minor exceptions apply, as set out in the sections in 8 U.S.C. 

Title 70, O.S., Section 3242 provides that illegal immigrants do not qualify for in-state tuition at state colleges in Oklahoma—except for students who are now already in attendance.

New language (Title 22, O.S., Section 171.2) will require any city or county jail to investigate the citizenship status or legal presence in the U.S. of anyone charged with a felony or D.U.I.  If the person is a foreign national and verification cannot be made through documents, the jail must contact Homeland Security within 48 hours for verification, and then must notify Homeland Security when it determines it is holding any person whose legal presence cannot be verified.  An illegal alien in this situation generally will be considered a flight risk, not eligible to post bail.

Another new provision (Title 74, O.S., Section 151.2) directs the Department of Public Safety (Highway Patrol) to establish and adequately staff (subject to funding) a Fraudulent Documents Identification Unit to investigate and apprehend persons who sell or distribute fraudulent identification documents. The overall emphasis is on illegal immigrants not being able to obtain phony I.D.’s; but targeting the people who are making and selling phony I.D.’s may have a “spill-over” benefit for banks, by making life tougher for crooks (probably not illegal immigrants) who are engaged in fraud through identity theft. 

6. Economic Costs

H.B. 1804 will involve substantial compliance costs for private businesses, and for benefits-distributing agencies and government units at all levels—state, county and city. 

Private businesses will spend additional time and expense in verifying new employees, as well as potential relationships with independent contractors. In some cases, a business will lose efficiency because an empty position cannot be filled until the verification process for a job applicant is completed.

Agencies charged with distributing federal, state and local benefits will be required to spend time verifying an applicant’s residency status. State and local boards that provide licensing of any kind will have to gather more information on applicants.  Colleges will also have to obtain more information on their students.

City and county jails must train employees to verify inmates’ legal status. This will require more staff, or overtime hours, for already strained jail budgets.  Delay in verifying someone’s legal presence in the U.S. may result in holding certain prisoners for a longer time, increasing overcrowding problems.