Legislature(2007 - 2008)HOUSE FINANCE 519

05/09/2007 08:30 AM House FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ SB 85 EXTEND STATE MEDICAL BOARD TELECONFERENCED
Moved Out of Committee
+ SB 105 REIMBURSEMENT FOR MUNICIPAL HARBOR DEBT TELECONFERENCED
Moved Out of Committee
+ HB 22 EXTEND BOARD OF GOVERNORS ABA TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 177 NATURAL GAS PIPELINE PROJECT TELECONFERENCED
Heard & Held
HOUSE BILL NO. 22                                                                                                             
                                                                                                                                
     An Act extending the termination date for the Board of                                                                     
     Governors of the Alaska Bar Association; and providing                                                                     
     for an effective date.                                                                                                     
                                                                                                                                
REPRESENTATIVE  BILL  STOLTZE, SPONSOR,  MOVED  to ADOPT  work                                                                  
draft #25-LS0138\L,  Bullard,  5/8/07, as  the version  of the                                                                  
bill before the Committee.  Representative Hawker OBJECTED.                                                                     
                                                                                                                                
9:07:06 AM                                                                                                                    
                                                                                                                                
Vice  Chair Stoltze  noted  that  last year,  the  Legislature                                                                  
extended  the sunset  for  the Alaska  Bar  Association.   The                                                                  
work draft  was crafted in order  to protect the stability  of                                                                  
the  Board.     Last  year's  fiscal  note  did   not  have  a                                                                  
departmental  allocation  and was  exempt  from  appropriation                                                                  
powers  of the  Legislature.    He emphasized  the  amount  of                                                                  
money received  by that professional board from  dues charged.                                                                  
He believed there are serious fiscal issues.                                                                                    
                                                                                                                                
9:10:31 AM                                                                                                                    
                                                                                                                                
JAMES   ARMSTRONG,   STAFF,   REPRESENTATIVE   BILL   STOLTZE,                                                                  
explained  that the draft  for HB 22  would extend the  sunset                                                                  
date of the Board  of Governor's Alaska Bar Association  (ABA)                                                                  
until  June 30,  2010;  it requires  an appropriation  by  the                                                                  
Legislature to dispense program funds.                                                                                          
                                                                                                                                
The  Board of  Governor  for  the Alaska  Bar  Association  is                                                                  
comprised of  12 members; nine  are elected by active  members                                                                  
of the  Alaska Bar Association  (ABA) with three  non-attorney                                                                  
members,  appointed  by  the Governor  and  confirmed  by  the                                                                  
Legislature.   The  ABA collects  dues  and other  fees on  an                                                                  
annual  basis   and  expends   those  funds  to  operate   the                                                                  
association.                                                                                                                    
                                                                                                                                
Mr. Armstrong  continued, the  bar association was  created in                                                                  
1955; the  funds that sustain  the bar association  are "State                                                                  
revenues"  and  the  ABA  continues  to  expend  that  revenue                                                                  
without an appropriation  by the Legislature.   The work draft                                                                  
will  correct the  situation, mandating  the ABA  to submit  a                                                                  
FY09  budget  request  through  the Alaska  Court  System  for                                                                  
review and approval by the Legislature.                                                                                         
                                                                                                                                
Additionally,  the draft  creates  a "lawyer  fund for  client                                                                  
protection"  as a new  sub-account, which  would be  contained                                                                  
in  the General  Fund.   ABA  currently maintains  such  fund,                                                                  
with  nearly $1.2  million  dollars, to  reimburse  attorneys'                                                                  
clients,  who  have  suffered  non-insured  losses  of  money,                                                                  
property, or  other valuable items,  as a result of  dishonest                                                                  
conduct  by  attorneys.    The  fund  is  preserved  with  the                                                                  
creation  of the sub-account,  contained  with in the  General                                                                  
Fund  & not lapsing,  subject  to appropriation  each year  by                                                                  
the Legislature.                                                                                                                
                                                                                                                                
Mr. Armstrong  pointed out that  the Sponsor intends  that ABA                                                                  
should  not  be  able  to  spend  State  funds  without  being                                                                  
authorized   to  do   so  through   an   appropriation.     He                                                                  
reiterated,  the legislation  brings the  ABA into  compliance                                                                  
with  Article  IX,  Section 13  of  the  Alaska  Constitution,                                                                  
which  states  that "no  money  shall  be withdrawn  from  the                                                                  
treasury,  except in  accordance with  appropriations made  by                                                                  
law".                                                                                                                           
                                                                                                                                
   ·    Section 1 is the extension of the Board until June                                                                      
        30, 2010                                                                                                                
   ·    Section 2 subjects the Board to dispense funds                                                                          
        subject to appropriation by the Legislature                                                                             
   ·    Section 3 clarifies that ABA should offer their                                                                         
        budget under the framework of the Alaska Court                                                                          
        System budget                                                                                                           
   ·    Section 4 establishes the lawyers fund for client                                                                       
        protection                                                                                                              
   ·    Section 5 places receipts of the ABA under the                                                                          
        fiscal procedures act as a funding source, receipt                                                                      
        support services                                                                                                        
   ·    Section 6 itemizes the applicability for the claims                                                                     
        & the budget provision & would not happen until FY09                                                                    
   ·    Section 7 provides the transitional provisions                                                                          
   ·    Sections 8 & 9 indicate the effective date                                                                              
                                                                                                                                
9:13:07 AM                                                                                                                    
                                                                                                                                
Representative  Hawker  spoke to  his objection  adopting  the                                                                  
work draft.  He  pointed out that the House Finance  Committee                                                                  
has had  a tradition of keeping  reauthorization bills  clean.                                                                  
Politics  should not be  thrown into  the authorization  of an                                                                  
organization.   He  emphasized that  the State  does not  want                                                                  
the  Alaska   Bar  Association  to   sunset.    The   bill  is                                                                  
introducing  a major material  policy change  at a late  date.                                                                  
The  bill  entered  the public  domain  ten  minutes  ago  and                                                                  
affects  the separation  of legislative  powers.   He  worried                                                                  
about  the  appropriateness  of  the  policy  call.    He  was                                                                  
concerned  that his constituents  had not  had an  opportunity                                                                  
to review  the bill & knew he  was not qualified to  determine                                                                  
if  it would  be  appropriate  policy.    He stated  that  the                                                                  
legislation  violates the  transparency  of State  government.                                                                  
Representative  Hawker urged that the Committee  not adopt the                                                                
committee substitute.                                                                                                           
                                                                                                                                
9:17:22 AM                                                                                                                    
                                                                                                                                
Vice Chair  Stoltze argued  that it  is not politics  creating                                                                  
the legislation  but rather  from concerns  of public  policy.                                                                  
He knew  that  the proposed  bill was  not a  surprise to  the                                                                  
legal community.   The State should have greater  oversight of                                                                  
the profession.                                                                                                                 
                                                                                                                                
9:19:26 AM                                                                                                                    
                                                                                                                                
Representative  Gara indicated  that  he did  not know  enough                                                                  
about the  proposal to determine  if it was  good or not.   He                                                                  
agreed the problem  should be identified; however,  he did not                                                                  
see a link between  the bill and the problem.   He recommended                                                                  
the bill be considered by the public.                                                                                           
                                                                                                                                
9:23:39 AM                                                                                                                    
                                                                                                                                
Representative  Kelly requested information on  the objectives                                                                  
and how the draft accomplishes that.                                                                                            
                                                                                                                                
9:25:34 AM                                                                                                                    
                                                                                                                                
Vice Chair  Stoltze countered  that the  largest issue  is the                                                                  
money that the  State requires the profession  to pay, tied to                                                                  
their ability  to make a living.   ABA does not have  the same                                                                  
oversight  obligations  of other  boards.   He  mentioned  the                                                                  
"slush"  fund and  how  that affects  their  dues.   The  bill                                                                  
reduces fees  by 40% during  the level-off  period.   Like any                                                                  
other  State  board,   membership  costs  would   have  to  be                                                                  
justified.   He wanted to see  more accountability.   The work                                                                  
draft  addresses  the leveling  of  the  dues to  reflect  the                                                                  
costs of running the board.                                                                                                     
                                                                                                                                
9:28:40 AM                                                                                                                    
                                                                                                                                
Co-Chair  Meyer  advised  that  the  comment  must  determine,                                                                  
which version the bill is being discussed.                                                                                      
                                                                                                                                
Representative  Hawker  addressed  the  process.   He  thought                                                                  
that adopting  the work  draft, would  appear as a  procedural                                                                  
acceptance  and  that by  adopting  it, places  the  Committee                                                                  
into  "retrograde"   action.    He  objected   to  that.    He                                                                  
recommended  that the  work  draft be  considered  only as  an                                                                  
amendment.                                                                                                                      
                                                                                                                                
9:31:42 AM                                                                                                                    
                                                                                                                                
Representative  Thomas  encouraged the  Department  of Law  to                                                                  
testify on the bill.                                                                                                            
                                                                                                                                
                                                                                                                                
AT EASE:        9:32:50 AM                                                                                                    
RECONVENE:      9:33:30 AM                                                                                                    
                                                                                                                                
                                                                                                                                
A roll call vote  was taken on the motion to adopt  the draft.                                                                  
                                                                                                                                
IN FAVOR:       Stoltze, Thomas, Meyer                                                                                          
OPPOSED:        Crawford, Foster, Gara, Hawker, Joule,                                                                          
                Nelson, Kelly                                                                                                   
                                                                                                                                
Co-Chair Chenault was not present for the vote.                                                                                 
                                                                                                                                
The MOTION FAILED (3-7).                                                                                                        
                                                                                                                                
9:34:43 AM                                                                                                                    
                                                                                                                                
Co-Chair Meyer  stated that the  original version of  the bill                                                                  
was before the Committee.                                                                                                       
                                                                                                                                
Representative  Gara  commented  if  there  were going  to  be                                                                  
amendments,  the testifiers  need to know  in order that  they                                                                  
can address  those concerns and  changes.  Vice Chair  Stoltze                                                                  
stated  he  did  not  anticipate  building   on  his  previous                                                                  
position.    Co-Chair Meyer  recommended  discussion  be  made                                                                  
toward  the  original bill  version.    Representative  Hawker                                                                  
concurred  with the  Chair.   Representative  Joule  clarified                                                                  
that the Committee is now addressing only the extension.                                                                        
                                                                                                                                
9:37:11 AM                                                                                                                    
                                                                                                                                
JOHN TIEMESSEN,  (TESTIFIED VIA  TELECONFERENCE), RECENT  PAST                                                                  
PRESIDENT,  ALASKA  BAR  ASSOCIATION,  ANCHORAGE,  noted  that                                                                  
past  boards have  only  appeared  before the  Legislature  on                                                                  
sunset  issues.   The  Alaska Bar  Association  is pledged  to                                                                  
have more contact with the Legislature.                                                                                         
                                                                                                                                
Mr. Tiemessen  mentioned current  programs being addressed  by                                                                  
the ABA:                                                                                                                        
                                                                                                                                
   · Diversity program requested by Representative Coghill,                                                                     
   · Mandatory education program initiated by Representative                                                                    
     Gruenberg, and                                                                                                             
   · Tiered dues proposal initiated by Senator McGuire and                                                                      
     Senator French.                                                                                                            
                                                                                                                                
Mr.  Tiemessen pointed  out that  the  Alaska Bar  Association                                                                  
has existed  in its  current form  since 1955.   The  lawyer's                                                                  
fund for client  protection has been in existence  since 1976.                                                                  
Currently,  there are over  3,000 members.   The core  mission                                                                  
of the Board of  Governor's and the Alaska Bar  Association is                                                                  
the admission  and discipline  of members.   That function  is                                                                  
handled  under the direct  supervision  of the Alaska  Supreme                                                                  
Court.  The Alaska  Bar is similar to the other  33 nationwide                                                                  
unified state bar associations.                                                                                                 
                                                                                                                                
9:43:29 AM                                                                                                                    
                                                                                                                                
Mr.  Tiemessen  addressed  concerns raised  in  the  Committee                                                                  
about   the  surplus,   which   presently,   ABA  does   have.                                                                  
Budgeting is  done on 10-year bases  and currently, is  in the                                                                  
earlier part  of that cycle.   He understood that was  not the                                                                  
manner  in which  other boards  and commissions  work.   Extra                                                                  
funds are  kept for the inevitable  day that the revenue  from                                                                  
the dues will not meet the operating expenses.                                                                                  
                                                                                                                                
9:45:04 AM                                                                                                                    
                                                                                                                                
Mr.  Tiemessen  pointed  out that  the  ABA  does not  have  a                                                                  
companion voluntary  organization.   Many programs are  run by                                                                  
volunteer  organizations  providing newsletters  and  referral                                                                  
services, group  health insurance, informal ethics  advice and                                                                  
that accounts for the difference in the staffing.                                                                               
                                                                                                                                
9:46:29 AM                                                                                                                    
                                                                                                                                
Mr. Tiemessen  addressed the  quality of  the office  space in                                                                  
the Atwood Building,  noting that the State of  Alaska invited                                                                  
the Bar Association  to take over  that space.  He  recognized                                                                  
that the  Legislature has  an important  role with the  Alaska                                                                  
Bar Association  and welcomed  opportunities to appear  before                                                                  
the State Legislature.                                                                                                          
                                                                                                                                
9:47:48 AM                                                                                                                    
                                                                                                                                
MATT CLAMAN,  (TESTIFIED VIA  TELECONFERENCE), NEW  PRESIDENT,                                                                  
ALASKA  BAR ASSOCIATION,  ANCHORAGE,  stated  that the  Alaska                                                                  
Bar Association  is responsive to the concerns  voiced through                                                                  
the  legislation.   He  mentioned the  dues  collected by  the                                                                  
Association  and   the  services  provided  for   those  dues,                                                                  
emphasizing the  services received by the public  members.  He                                                                  
offered  to answer  questions of  the Committee.   Mr.  Claman                                                                  
encouraged that  the Bar be extended  for another  three years                                                                  
pointing out that they are supervised by the Supreme Court.                                                                     
                                                                                                                                
9:51:44 AM                                                                                                                    
                                                                                                                                
Representative  Gara stressed that  the concerns noted  by the                                                                  
Legislature are  not going to disappear.  He recommended  that                                                                  
entry  dues  be  addressed.   Mr.  Claman  was  aware  of  the                                                                  
concerns,  advising  that a  committee  had been  assigned  to                                                                  
investigate the concerns.                                                                                                       
                                                                                                                                
9:53:12 AM                                                                                                                    
                                                                                                                                
MICHAEL SCHEIDER,  (TESTIFIED  VIA TELECONFERENCE),  ATTORNEY,                                                                  
ANCHORAGE, noted  that he did  not agree with everything  that                                                                  
the Bar  supports, however,  receives  tremendous service  for                                                                  
the cost  of his  dues.  He  recommended that  the Bar  not be                                                                  
sunset or amended.                                                                                                              
                                                                                                                                
9:54:46 AM                                                                                                                    
                                                                                                                                
WAYNE  ROSS,  (TESTIFIED   VIA  TELECONFERENCE),   ALASKA  BAR                                                                  
ASSOCIATION,  ANCHORAGE,  stated  that  the  Alaska Bar  is  a                                                                  
great  organization, with  great  programs.   He stated  there                                                                  
should  be no changes  made.   He added that  the due  charges                                                                  
are less than other bars in the country.                                                                                        
                                                                                                                                
9:56:02 AM                                                                                                                    
                                                                                                                                
STEVE VANGOOR,  (TESTIFIED VIA  TELECONFERENCE), BAR  COUNSEL,                                                                  
ALASKA   BAR  ASSOCIATION,   ANCHORAGE,   offered  to   answer                                                                  
questions of the Committee.                                                                                                     
                                                                                                                                
9:56:33 AM                                                                                                                    
                                                                                                                                
Vice Chair  Stoltze  stated that  he had no  further plans  to                                                                  
attempt passage of the work draft.                                                                                              
                                                                                                                                
HB 22 was HELD in Committee for further consideration.                                                                          

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