04/13/2006 08:00 AM House STATE AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| SB310 | |
| SB86 | |
| HB461 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | SB 86 | TELECONFERENCED | |
| += | HB 461 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 310 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE STATE AFFAIRS STANDING COMMITTEE
April 13, 2006
8:01 a.m.
MEMBERS PRESENT
Representative Paul Seaton, Chair
Representative Carl Gatto, Vice Chair
Representative Jim Elkins
Representative Bob Lynn
Representative Jay Ramras
Representative Berta Gardner
Representative Max Gruenberg
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE BILL NO. 310
"An Act relating to the employment of prisoners; and providing
for an effective date."
- HEARD AND HELD
CS FOR SENATE BILL NO. 86(CRA)(efd fld)
"An Act relating to the liability of the state and
municipalities for attorney fees in certain civil actions and
appeals."
- HEARD AND HELD
HOUSE BILL NO. 461
"An Act relating to disclosure to the Alaska Public Offices
Commission of information about certain income received as
compensation for personal services by legislators, public
members of the Select Committee on Legislative Ethics, and
legislative directors subject to the provisions of law setting
standards of conduct for legislative branch officers and
employees; and providing for an effective date."
- MOVED CSHB 461(STA) OUT OF COMMITTEE
OVERVIEW: DIVISION OF ELECTIONS, ELECTRONIC VOTING
- AGENDA ITEM POSTPONED TO 04/20/06
PREVIOUS COMMITTEE ACTION
BILL: SB 310
SHORT TITLE: EMPLOYMENT OF PRISONERS
SPONSOR(s): FINANCE
03/20/06 (S) READ THE FIRST TIME - REFERRALS
03/20/06 (S) FIN
03/27/06 (S) FIN RPT 4DP 1NR
03/27/06 (S) DP: WILKEN, GREEN, DYSON, STEDMAN
03/27/06 (S) NR: HOFFMAN
03/27/06 (S) FIN AT 9:00 AM SENATE FINANCE 532
03/27/06 (S) Moved SB 310 Out of Committee
03/27/06 (S) MINUTE(FIN)
03/31/06 (S) TRANSMITTED TO (H)
03/31/06 (S) VERSION: SB 310
04/03/06 (H) READ THE FIRST TIME - REFERRALS
04/03/06 (H) STA, L&C, FIN
04/11/06 (H) STA AT 8:00 AM CAPITOL 106
04/11/06 (H) Scheduled But Not Heard
04/13/06 (H) STA AT 8:00 AM CAPITOL 106
BILL: SB 86
SHORT TITLE: STATE/MUNI LIABILITY FOR ATTORNEY FEES
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
01/31/05 (S) READ THE FIRST TIME - REFERRALS
01/31/05 (S) CRA, JUD
02/09/05 (S) CRA AT 1:30 PM BELTZ 211
02/09/05 (S) Heard & Held
02/09/05 (S) MINUTE(CRA)
04/04/05 (S) CRA AT 1:30 PM BELTZ 211
04/04/05 (S) Moved CSSB 86(CRA) Out of Committee
04/04/05 (S) MINUTE(CRA)
04/05/05 (S) CRA RPT CS 1DP 2DNP 2NR
SAME TITLE
04/05/05 (S) NR: STEVENS G, STEDMAN
04/05/05 (S) DP: WAGONER
04/05/05 (S) DNP: ELLIS, KOOKESH
04/15/05 (S) JUD AT 8:00 AM BUTROVICH 205
04/15/05 (S) Heard & Held
04/15/05 (S) MINUTE(JUD)
04/18/05 (S) JUD RPT CS(CRA) 3DP 2DNP
04/18/05 (S) DP: SEEKINS, THERRIAULT, HUGGINS
04/18/05 (S) DNP: FRENCH, GUESS
04/18/05 (S) JUD AT 8:30 AM BUTROVICH 205
04/18/05 (S) Moved CSSB 86(CRA) Out of Committee
04/18/05 (S) MINUTE(JUD)
05/06/05 (S) TRANSMITTED TO (H)
05/06/05 (S) VERSION: CSSB 86(CRA)(EFD FLD)
05/07/05 (H) READ THE FIRST TIME - REFERRALS
05/07/05 (H) STA, JUD
03/23/06 (H) STA AT 8:00 AM CAPITOL 106
03/23/06 (H) Heard & Held
03/23/06 (H) MINUTE(STA)
04/13/06 (H) STA AT 8:00 AM CAPITOL 106
BILL: HB 461
SHORT TITLE: LEGISLATIVE DISCLOSURES
SPONSOR(s): REPRESENTATIVE(s) GARDNER
02/13/06 (H) READ THE FIRST TIME - REFERRALS
02/13/06 (H) STA, JUD
03/30/06 (H) STA AT 8:00 AM CAPITOL 106
03/30/06 (H) Heard & Held
03/30/06 (H) MINUTE(STA)
04/04/06 (H) STA AT 8:00 AM CAPITOL 106
04/04/06 (H) Heard & Held
04/04/06 (H) MINUTE(STA)
04/13/06 (H) STA AT 8:00 AM CAPITOL 106
WITNESS REGISTER
DARWIN PETERSON, Staff
to Senator Lyda Green
Senate Finance Committee
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented SB 310 on behalf of the Senate
Finance Committee, sponsor.
SHARLEEN GRIFFIN, Director
Central Office
Division of Administrative Services
Department of Corrections (DOC)
Juneau, Alaska
POSITION STATEMENT: Answered questions on behalf of the
department during the hearing on SB 310.
BRAD THOMPSON, Director
Division of Risk Management
Department of Administration
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on SB
310.
RANDY RUARO, Assistant Attorney General & Legislative Liaison
Legislation & Regulations Section
Civil Division (Juneau)
Department of Law
Juneau, Alaska
POSITION STATEMENT: Testified on behalf of the department
during the hearing on SB 86.
ROBERT SPARKS
Fairbanks, Alaska
POSITION STATEMENT: Testified on behalf of himself to describe
SB 86 as shortsighted.
BARRY DONNELLAN
Fairbanks, Alaska
POSITION STATEMENT: Testified on behalf of himself during the
hearing on SB 86 to warn against the state's raising the bar
against a private citizen raising a grievance with the state.
MICHAEL W. MacLEOD-BALL, Executive Director
American Civil Liberties Union (ACLU) of Alaska
Anchorage, Alaska
POSITION STATEMENT: Testified in opposition to SB 86.
KARI ROBINSON, Legal Advocacy Project (LAP)/Project Attorney
Alaska Network on Violence & Sexual Assault (ANVSA)
Juneau, Alaska
POSITION STATEMENT: Testified in opposition to SB 86.
KAY ROLLISON
Anchorage, Alaska
POSITION STATEMENT: Testified on behalf of herself in
opposition to SB 86.
BROOKE MILES, Executive Director
Alaska Public Offices Commission (APOC)
Anchorage, Alaska
POSITION STATEMENT: Offered APOC's opinion regarding language
of a committee substitute to HB 461.
ACTION NARRATIVE
CHAIR PAUL SEATON called the House State Affairs Standing
Committee meeting to order at 8:01:23 AM. Representatives
Gatto, Elkins, Gardner, and Seaton were present at the call to
order. Representatives Lynn, Ramras, and Gruenberg arrived as
the meeting was in progress.
SB 310-EMPLOYMENT OF PRISONERS
8:03:18 AM
CHAIR SEATON announced that the first order of business was
SENATE BILL NO. 310, "An Act relating to the employment of
prisoners; and providing for an effective date."
8:03:33 AM
DARWIN PETERSON, Staff to Senator Lyda Green, Senate Finance
Committee, Alaska State Legislature, presented SB 310 on behalf
of the Senate Finance Committee, sponsor. He explained that the
bill is being introduced at the request of the Department of
Corrections.
8:04:47 AM
MR. PETERSON, in response to a question from Chair Seaton, said
the department knows which amendments the committee approves and
has the authority to speak on behalf of the committee regarding
those amendments. He stated his assumption that if the
department were to come across any amendments it has never seen
before, it would let the committee know about them at that
point.
MR. PETERSON continued with his presentation of SB 310, by
paraphrasing the sponsor statement, which read as follows
[original punctuation provided]:
The legislation that created the Alaska Correctional
Industries program and commission was repealed on July
1, 2005. The primary purpose of SB 310 is to provide
the necessary statutory authority so the Department of
Corrections can continue providing inmate work and
training programs without interruption.
SB 310 is needed to provide for employment of prison
inmates under AS 33/30. This employment program will
be funded from Receipt Support Service funds. The bill
provides the necessary statutory authority to
participate in critical federal Prison Industry
Enhancement (PIE) programs. It also grants the
authority to actively participate and partner with
private enterprise. These partnerships will provide
realistic work experience and vocational training for
prisoners under conditions similar to those that
prevail in the private sector. SB 310 will allow the
department to make a deduction from the offenders'
wages to apply to the cost of confinement. These
receipts will support the prison employment program.
In addition, the prison employment program will allow
inmates to work toward financial responsibility by
taking deductions from wages to pay for child support,
victim restitution, criminal fines, civil judgments,
fees for utilities, as well as other obligations.
SB 310 is a vital piece of legislation if we are to
continue inmate work and vocational training programs
in our correctional facilities.
8:07:10 AM
REPRESENTATIVE ELKINS asked for confirmation that the bill in no
way would alter or shut down the program.
MR. PETERSON assured Representative Elkins it would not. He
explained that SB 310 is basically a redrafting of the previous
program that was allowed to sunset. The only difference is that
there would not be a commission; the department would oversee
the program.
8:07:41 AM
REPRESENTATIVE GARDNER asked if the fact that the program was
allowed to sunset was inadvertent, or if there was reason for
it.
8:07:57 AM
MR. PETERSON relayed that the commission was intentionally
allowed to sunset, but suggested that the department address the
issue of the statutes that were inadvertently allowed to sunset
"in addition to that." He concluded, "Those statutes that were
repealed when the commission 'sunsetted' is what this
legislation would not put back into effect."
8:08:20 AM
CHAIR SEATON noted that there is a furniture making program in
Seward and a laundry program in Juneau, both related to the
corrections industry. He asked, "Is this also necessary for the
internal cleaning and internal maintenance that is performed by
prisoners at the prisons throughout the state?"
8:08:49 AM
MR. PETERSON said those programs that currently exist will have
to be discontinued if the proposed legislation is enacted.
8:09:10 AM
CHAIR SEATON clarified that the second part of his previous
question was whether the bill is also necessary to enable
prisoners around the state to "do the work, and the maintenance,
and the painting, and the cleaning."
8:09:22 AM
MR. PETERSON deferred to the department for an answer to that
portion of Chair Seaton's question.
8:10:05 AM
SHARLEEN GRIFFIN, Director, Central Office, Division of
Administrative Services, Department of Corrections (DOC), in
response to Chair Seaton's unanswered question, confirmed that
it would make a difference to the regular programs in the prison
facilities if SB 310 were not enacted. She explained that there
was a provision in the previous statute for exemption from
workers' compensation, and without SB 310, the department would
have to pay workers' compensation for inmate labor. She
continued:
The workers' compensation portion is not necessary;
the department is [responsible] for inmate healthcare,
and if a worker is injured doing anything that they
do, the department picks up the cost of that inmate
healthcare. If it exceeds what the department is
capable of doing and becomes a risk management issue,
then we work with [the Division of] Risk Management on
it.
8:11:15 AM
MS. GRIFFIN, regarding the sunset, explained that the sunset was
inadvertent and everyone involved missed the fact that the
legislation was going to sunset.
8:11:56 AM
CHAIR SEATON clarified that the intent had been to "sunset the
commission," and when that happened, all the programmatic
functions ended as well.
8:12:01 AM
MS. GRIFFIN confirmed Chair Seaton's remark.
8:12:08 AM
REPRESENTATIVE GARDNER asked if the workers' compensation
requirement applies to internal labor for maintenance and
routine jobs within the facility, or "this employment program."
8:12:32 AM
MS. GRIFFIN responded that the only exemption there was for not
paying workers' compensation on inmate labor at all was in the
correctional industry statute. She said there is not a related
exemption in the workers' compensation statutes. Furthermore,
AS 33.30.201 references the correctional industry statutes, AS
33.32, for the exemption of workers' compensation to apply to
facility inmate labor. In response to follow-up questions from
Representative Gardner, she stated that under SB 310, all
offenders providing labor would once again be exempted from
workers' compensation - for either type of labor.
8:13:46 AM
REPRESENTATIVE GATTO asked who would pick up the workers'
compensation costs for an inmate who, for example, was injured,
became a paraplegic, and could no longer work.
MS. GRIFFIN deferred the question to Brad Thompson.
8:14:01 AM
BRAD THOMPSON, Director, Division of Risk Management, Department
of Administration, stated that an inmate who is severely injured
may have a tort liability case presented on his/her behalf. He
said, "There is not the exclusive remedy protection that an
employee is precluded from suing their employer in our
involvement with inmates. That's the policy call and the trade-
off of not providing the workers' compensation."
8:15:48 AM
REPRESENTATIVE GARDNER proffered, "If workers' compensation were
to be provided, it would be carried by the industry partner, but
not the prison industries, if we're talking about the
correctional industry's program."
8:16:03 AM
MR. THOMPSON responded as follows:
If there was workers' compensation provided to the
inmate participating in the correctional industry's
program, and they're working for an outside entity,
they could, in their purchase of workers' compensation
- a statutory policy, also provide remedy to the
inmate. But that's ... a policy call.
8:16:32 AM
CHAIR SEATON said:
Just to clarify, that was for only those inmates that
were working in conjunction with another industry; but
all of the other exemptions for workers working within
the walls of the prison doing maintenance, and
painting, and cleaning ... wouldn't be covered by any
outside -- I mean, that's not done in conjunction with
any other outside entity, is it?
8:16:54 AM
MR. THOMPSON answered:
If they were determined to be employees under the
[Alaska Workers' Compensation] Act, then in this
activity - performing service for corrections in the
upkeep and maintenance of the facilities - ... Risk
Management ... provide[s] the self-insurance
protection for the State of Alaska as an employer.
And so, if the State Department of Corrections was
defined to be the employer of these individuals, it
would be through our offices.
8:17:52 AM
MR. THOMPSON, in response to a request from Chair Seaton for
further clarification, explained:
The present system is, there is no workers'
[compensation]. If there is injury, the medical is
paid by [the Department of] Corrections, as is all
medical [that] is being provided to inmates, whether
it was [for] accidental [injury] or any other cause.
In a prison industry's program, where they're working
for an independent party - where they're performing
work ... building furniture and they're working for
ABC Industries - they today are not eligible for
workers' compensation. And so, if that changed, if
... both ... programs - correctional industries as
well as within the maintenance side ... - ... were
defined to be employees, [then the Division of] Risk
Management, on behalf of [the Department of]
Corrections, would provide the workers' [compensation]
for the maintenance activity, and then the independent
employer - if they were working for ABC Industries in
their statutory policy - would be required to provide
workers' [compensation].
8:19:18 AM
MR. THOMPSON, in response to follow-up questions from Chair
Seaton, related that the Division of Risk Management "provides
the workers' compensation remedy owed to any state employee on
behalf of the Department of Corrections, or any other agency."
He reiterated that today workers' compensation is not being
paid, but there are tort liability exposures or medical
provisions being paid as part of the medical benefit program
under [the Department of] Corrections. He concluded, "If there
is workers' compensation, then the Division of Risk Management
would be responsive."
8:20:04 AM
REPRESENTATIVE GARDNER asked first if prisoners are paid for
doing the internal maintenance-type work, and second, if there
is any reason that the legislature should waive workers'
compensation for correctional industries, given that it exposes
the state to risk.
8:20:36 AM
MS. GRIFFIN told Representative Gardner that the prisoners are
paid between 30-60 cents an hour for work done within the
prisons, such as janitorial, maintenance, and kitchen help, and
are not presently covered by workers' compensation. In order
for those workers to be covered by workers' compensation, a rate
would have to be determined relating to how much needed to be
provided to [the Division of] Risk Management. She stated her
understanding that that rate would probably be high, based on
the number of inmates that are working, even thought they don't
make that much money. She emphasized the importance to the
security of prisons in keeping inmates productively busy.
8:21:43 AM
MS. GRIFFIN offered an example of a case in which a former
inmate who was in a halfway house was injured while performing
community work for a nonprofit organization as a condition of
his release. The workers' compensation board found that, under
law, there was not an express contract between the man who was
attempting to become an employee and the employer, because the
former inmate was still under the control of the Department of
Corrections. He noted that many states have preclusions for
workers' compensation to clarify that "these individuals working
within and outside the walls in these industry programs are not
eligible for workers' [compensation]." He said these
individuals are provided with medical [coverage], and he
reiterated that if they are significantly injured and there is a
tort liability, the state still has "an exposure for general
liability for these individuals." He said those cases are rare,
but when they happen they are resolved.
8:23:49 AM
REPRESENTATIVE GRUENBERG said one of the reasons that workers'
compensation laws came into existence is because employers and
potential defendants wanted them. He stated, "Prisoners love to
litigate, and they can ... file a tort claim pro per." He
indicated that the Division of Risk Management would have to
have its own lawyer. He asked, "Wouldn't it be just cheaper to
cover them?"
8:24:32 AM
MR. THOMPSON reiterated that although some of the tort claims
that have arisen are significant, their occurrence is a rarity.
He indicated that [covering all prisoners with workers'
compensation] would be very expensive.
8:25:35 AM
REPRESENTATIVE GATTO directed attention to page 7, [lines 3-4],
which read:
RETROACTIVITY: THE NONCOVERAGE OF AS 23.30. The
provisions of sec. 12 of this Act apply retroactively
to July 1, 2005.
REPRESENTATIVE GATTO asked:
Since you had exceeded the fiscal note in previous
legislation, I would assume, how did you manage to pay
to keep the operation going between the time you had
essentially no money, because it was never
appropriated, and now?
8:26:18 AM
MS. GRIFFIN responded, "This is where the sunset of the Act was
missed by everyone." She said DOC received an appropriation
from the legislature, through the correctional industry's fund.
She said that fund is an ongoing one from which DOC makes
expenditures and deposits receipts. She stated, "We did not
realize on July 1, that it didn't exist - we really didn't
figure it out until ... [about October] - and we continued
business as usual." Ms. Griffin said that explains why there is
a retroactive date "to cover this year and to change it from the
correctional industry's fund to receipt support services."
8:27:43 AM
MS. GRIFFIN, in response to follow-up questions from
Representative Gatto, said the fund is that of the correctional
industry, and she recollected the fund number is 22654. She
revealed that the fund balance as of July 1, 2005, was
approximately $300,000, and thus that money was available for
expenditures and selling services and products. She concluded,
"So, there's no additional funding required to make up for the
operations thus far this year."
8:30:13 AM
CHAIR SEATON closed public testimony.
8:30:22 AM
REPRESENTATIVE GRUENBERG stated his understanding that there is
some behind-the-scenes negotiating that is taking place.
8:30:29 AM
REPRESENTATIVE ELKINS moved Conceptual Amendment 1, as follows:
On page 5, line 20:
Move paragraph (6) to line 16 and renumber it
paragraph (4)
Move paragraph (4) to line 18 and renumber it
paragraph (5)
Move paragraph (5) to line 20 and renumber it
paragraph (6)
8:31:22 AM
CHAIR SEATON objected for discussion purposes. He reviewed the
amendment.
8:33:13 AM
MS. GRIFFIN, in response to a request from Chair Seaton,
indicated that the department would support [Conceptual
Amendment 1], the result of which would be to change the order
in which the department would apply deductions related to
offender wages. She offered further details. In response to a
follow-up question from Chair Seaton, she said [the money would
be apportioned] proportionally. She noted, "Child support
orders are first, and they generally have a percentage of the
wages that [are] to be paid, and that's usually stated in the
order."
8:35:44 AM
CHAIR SEATON asked, "Is there currently a percentage of their
wages that do go to restitution anyway?"
8:35:58 AM
MS. GRIFFIN said she thinks that depends on how the court order
reads. She stated her belief that there is a percentage applied
"as it goes down the line." She offered to follow up on that
issue for the committee.
8:36:12 AM
CHAIR SEATON said he is concerned, because he has not seen
anything in statute that says that "you will only take out a
percentage of it for this." He relayed that court orders for
dependents, for example, are generally listed on percentages,
and he said he is not sure if restitutions are done the same
way. He stated, "I want to make sure that by making this change
... we don't get into the legal hole of making it so that the
prisoner has zero incentive for participating in the program,
and then you end up with very incorrigible people with no
leverage over them."
8:37:06 AM
CHAIR SEATON removed his objection, but said he wants the
department to get back to him about this issue. There being no
further objection, Conceptual Amendment 1 was adopted.
8:38:00 AM
REPRESENTATIVE GRUENBERG stated his understanding that "the
parties are working out some accommodations."
8:38:11 AM
REPRESENTATIVE GARDNER said she is troubled by the workers'
compensation issue. She directed attention to page 6, [lines
29-31], which read:
the provisions of AS 23.30 (Alaska Workers'
Compensation Act) do not apply to inmates employed in
a prison employment program operated by the Department
of Corrections.
REPRESENTATIVE GARDNER asked whether the jobs in correctional
industries fall under "prison employment program operated by the
Department of Corrections", or whether that phrase refers to the
"internal works."
8:39:05 AM
MS. GRIFFIN replied that Correctional Industries is a program
operated by the Department of Corrections; however, not all
correctional industry programs involve a vendor outside the
department. For example, there is a sewing factory in Highland
Mountain Correctional Center that currently makes all the
clothing for inmates. She concluded, "So, not all correctional
industry programs involve the public sector."
8:39:48 AM
REPRESENTATIVE GARDNER asked if it makes sense to draw a line
between the employment which is funded through the Department of
Corrections and employment which is paid by an outside
organization.
8:40:00 AM
MS. GRIFFIN responded that that might work in some cases. She
said federal regulations for the PIE programs allow either
workers' compensation "or its equivalent." In more of a free
venture program, the company pays to the department minimum wage
for all hours worked by inmates; however, the inmates are only
allowed to have 50 percent of minimum wage posted to their
account for their pay. Currently, she noted, the state files
1099 forms for inmate labor, as opposed to wage statements that
have all of the withholdings. She indicated that she had not
really considered the effect of "whether, if the employer were
paying workers' compensation, ... we would have some offenders
receiving W2s from the private employer, and those working in
the institution in industries receiving 1099s." In response to
a question from Chair Seaton, Ms. Griffin confirmed that the
1099 form is for miscellaneous income.
8:42:07 AM
REPRESENTATIVE GARDNER said she would like to explore this issue
further before offering an amendment. She explained:
I do have concerns about the whole workers'
[compensation] issue, and if they're paid externally
on an hourly rate that's minimum wage or more ... they
really are employees of some other agency, and I don't
... agree with saving the employer workers'
[compensation] money and opening the state to
liability. But I don't think we have to do that here
if there's another opportunity to ... have an
amendment ready for next time.
8:42:48 AM
MS. GRIFFIN said she believes there has been discussion among
attorneys related to "having those contracts with private
vendors read in such a manner that they are also liable."
8:43:36 AM
MR. THOMPSON added that in its contract agreements with
independent vendors, DOC would require the vendors to hold the
state harmless "for claims arising from these activities and
operations," and it would make the vendors carry a liability
policy, "such that they would have the means to effect a
commitment to hold us harmless." He concluded, "And so, those
injuries typically would occur while they're not on our
premises, or if in fact they're on our premises, they have the
directional management and control of the inmate at that time.
So, they have the responsibility to resolve the claim."
8:44:25 AM
REPRESENTATIVE GARDNER asked, "Has there ever been occasion to
actually rely on those policies?"
8:44:37 AM
MR. THOMPSON answered that there has been claim history when
injury occurred to inmates off premise involving "a contractual
tender of defenses."
8:44:44 AM
REPRESENTATIVE LYNN recalled that Chair Seaton had previously
commented regarding "the nature of what's being worked out." He
asked if that nature has anything to do with provisions that
would protect law-abiding workers from competition from criminal
workers.
8:45:31 AM
MS. GRIFFIN confirmed that that is indeed the nature of what is
being worked out. She noted that there are provisions in the
PIE program that require, before beginning a program: meeting
with organized labor, involving the Department of Labor to
determine prevailing wages, and not creating competition for
organized bargaining units or displacing workers. She stated
her understanding that "what we are working towards is having
something very similar, if not the same, applied to any industry
that ... would be free venture with a private organization."
8:46:14 AM
MS. GRIFFIN, in response to a follow-up question from
Representative Lynn, offered her belief that there would be an
upcoming amendment to address this issue.
CHAIR SEATON said it is not the intent of the committee to hold
up the bill; however, he said he wants to ensure that any
necessary amendments are incorporated.
8:46:54 AM
MS. GRIFFIN related that there is an amendment being worked on
presently.
8:47:11 AM
CHAIR SEATON asked Representative Gardner to work with DOC to
ensure that any amendments to be offered are received by the
committee in writing before the next meeting.
8:47:34 AM
REPRESENTATIVE GARDNER [nodded].
8:47:43 AM
MS. GRIFFIN concluded that the passage of SB 310 is critical in
order to keep inmates productively employed. She reiterated
that having inmates working and busy is vital to the security of
the institution. In response to a request from Chair Seaton,
she said she would have a response for the committee, regarding
the reprioritization of the deductions, by the next meeting.
8:49:06 AM
[The committee held discussion regarding its upcoming calendar.]
8:50:38 AM
CHAIR SEATON announced that SB 310 was heard and held.
SB 86-STATE/MUNI LIABILITY FOR ATTORNEY FEES
8:51:06 AM
CHAIR SEATON announced that the next order of business was CS
FOR SENATE BILL NO. 86(CRA)(efd fld), "An Act relating to the
liability of the state and municipalities for attorney fees in
certain civil actions and appeals."
8:51:16 AM
RANDY RUARO, Assistant Attorney General & Legislative Liaison,
Legislation & Regulations Section, Civil Division (Juneau),
Department of Law, said he was standing in for Mr. Tillery, who
had testified during the 3/23/06 hearing on SB 86. He said he
would address a question asked at the last bill hearing,
regarding a concern that the bill would mandate a payment by the
state in an appeal of 20-30 percent of the prevailing party's
reasonable fees. Mr. Ruaro explained that that amount is a cap,
not a mandated amount, which he noted is shown in language on
page 2, [Section 2, subsection (a)].
The committee took an at-ease from 8:53:25 AM to 8:54:37 AM.
8:55:13 AM
REPRESENTATIVE GRUENBERG said if the intent is to limit the
courts in what they can procedurally award, then he doesn't
think "this Act is effective to do that because it doesn't have
a title that says it amends the appellate rules or it doesn't
amend the civil rule, and it doesn't have the required two-
thirds vote, obviously." He asked Mr. Ruaro if he is aware of
that deficiency in the bill.
8:55:58 AM
MR. RUARO said Representative Gruenberg's concern mirrors that
which the committee had asked Mr. Tillery and Mr. Ruaro to
research during the last hearing of the bill. He clarified that
Representative Gruenberg's point is that the bill effects a
court rule change, thus mandating the title requirement and the
two-thirds vote.
REPRESENTATIVE GRUENBERG inserted, "It effects at least two:
Rule 82 and the appellate rule as well."
8:56:43 AM
MR. RUARO, on that point, stated that he disagrees that it
effects a court rule. He offered his belief that the public
interest litigant doctrine isn't spelled out in either Rule 82
or Rule 508; those rules speak generally to awards of attorney
fees. He stated, "The public interest litigant doctrine, I
believe, is case law, starting with the McCabe case and then
proceeding through a number of other cases. And I believe that
the two-thirds vote requirement applies to rules of procedure
that are expressly promulgated by the court, and that the public
interest litigant doctrine is not contained in either of those
rules."
8:57:23 AM
REPRESENTATIVE GRUENBERG responded that Mr. Ruaro's statement
seems to be novel legal theory, and he asked Mr. Ruaro if he has
any precedent to support his position.
8:57:41 AM
MR. RUARO replied that the cases themselves speak about the
doctrine and the right to receive attorney fees, but the term
public interest litigant, or the amount to be awarded, or the
rule that fees will not be apportioned among issues if one is a
public interest litigant doesn't appear in the language of the
rules. He said, "It's all case law as far as I could tell."
8:58:14 AM
REPRESENTATIVE GRUENBERG offered his understanding that Mr.
Ruaro is making the argument that because the rule itself is
established in the case, therefore the constitutional provision
does not apply. He asked, "I'm not aware of any case holding to
that effect, are you?"
8:58:42 AM
MR. RUARO said there is a case which references the test that
courts apply: Nolan B.C. Air Motive 627 P.2d 1035. In that
case, he said, the court notes that there has to be an initial
finding that the statute that the legislature passed actually
conflicts with a rule promulgated by the court. Mr. Ruaro said
he interprets that language to mean that "it has to be an
express rule that the court has adopted." He continued:
I think the distinction is a bright-line test, and
that's whether or not the court has expressly adopted
it as a rule. If it were not, the legislature would
be left to guess every time the court issued a
decision, whether or not [this is] a two-thirds
requirement .... So, I guess I read Nolan to require
a bright-line test of whether it actually appears in a
rule.
8:59:59 AM
REPRESENTATIVE GRUENBERG recollected that in the past there was
a similar bill limiting attorney fees which passed without a
two-thirds vote and "at least the superior court struck it down
on that basis."
9:00:36 AM
MR. RUARO said he thinks Representative Gruenberg is referring
to House Bill 145, and he said an [Alaska] Superior Court judge
did hold that there was a two-thirds vote requirement. He said
the state's position on appeal was that the judge was incorrect.
9:00:44 AM
REPRESENTATIVE GRUENBERG responded that that may be that state's
position, but the case, as it stands, is directly opposite to
the position of SB 86. He concluded, "So why don't you be
certain and put that in?"
9:01:05 AM
MR. RUARO said there are additional reasons that SB 86 does not
require a two-thirds vote "beyond that distinction that the
judge made in that case." He noted that Article 2, Section 21
of the [Alaska State] Constitution specifically grants the
legislature the authority to provide the rules for sovereign
immunity of the state and municipalities. He continued:
That was not present in [House Bill] 145. So, ...
there's a distinction to make between [House Bill] 145
and the basis or the authority for SB 86, which is:
SB 86 is a function or a result of the legislature
using its ... very specific constitutional grant of
authority to exercise a core function, which is to
protect the state in the means it deems fit. And I
would argue that that specific grant of authority -
even if public interest litigant doctrine was embodied
in a court rule - ... must give way to ... the
legislature's authority under Article 2, Section 21.
And the language there ... specifically grants the
legislature the authority to determine the procedures
for suits against the state.
9:02:47 AM
REPRESENTATIVE GRUENBERG asked Mr. Ruaro if there is any
precedent for that opinion.
9:02:54 AM
MR. RUARO answered yes: Alaska v. O/S Lynn Kendall. He said,
"It's not exactly on point, but it does say the Constitution of
the State of Alaska grants to the legislature the sole and
exclusive power to enact laws establishing the terms and
conditions upon which the state may be sued." He continued:
And I would just note that the position I'm arguing is
also consistent with the U.S. Supreme Court decision
in Alyeska Pipeline Service Company v. Wilderness
Society and other federal decision where the courts
have noted that it would be inappropriate for the
judiciary to create a general rule independent of
statute to allow attorney fee awards in the courts,
and that those matters are subject to Congress'
determinations. So, I guess I would argue my position
as also consistent with U.S. Supreme Court law.
9:03:57 AM
REPRESENTATIVE GRUENBERG said he would like copies of those
cases as soon as possible.
9:04:08 AM
MR. RUARO said he would provide those copies.
9:04:15 AM
CHAIR SEATON said he does not think that's the core of the
issue. He opined that the core of the issue is whether the
committee is proceeding on the basis of ensuring that the public
has reasonable access to redress bad laws that are possibly
unconstitutional or ordinances that violate state law. He said
people who challenge their government for the aforementioned
reasons - not for personal gain - will have huge out-of- pocket
expenses even if they win, if the legislature only allows 20
percent reimbursement of actual expenses. He said the House
State Affairs Standing Committee has a policy decision to make
as to whether to raise the bar for those people, which would
result in their being less able to sue. He indicated that
looking at the court rule issue is more in line with the
perspective of the House Judiciary Standing Committee.
9:05:58 AM
MR. RUARO said he understands Chair Seaton's concern. He said,
"I think the answer is that all of the things you mentioned can
still be in place; it's simply that the legislature will be the
entity that's exercising the authority to determine that, as
opposed to the court system.
9:07:10 AM
CHAIR SEATON asked how the legislature would exercise that
authority, should the bill pass.
9:07:30 AM
MR. RUARO explained that if SB 86 passed and a particular group
or entity wanted to receive the right to recover enhanced fees,
it would lobby the legislature, and the legislature could pass a
statute - similar to what the legislature has done related to
consumer protection, imminent domain, or other exceptions that
the legislature currently has on the books - and receive that
exception. He said, "In the first instance, I guess, the entity
making that policy decision would be the legislature, as opposed
to the court system."
MR. RUARO, in response to a question from Chair Seaton,
clarified that he is talking about a situation where - rather
than going back and making an appropriation after the case is
over - a group or interested party would have a ... legislator
introduce a bill that said, "This class or this group of
litigants is entitled to receive enhanced attorney fees, and
here's why." The legislature would act on that legislation, and
then in subsequent cases that fell within that category, those
entities would be entitled to receive the enhanced fees.
9:08:24 AM
CHAIR SEATON responded:
I think ... that might be good for something like ...
the last ... challenged reapportionment .... In fact,
it's the second largest year in suit cases under
public interest litigants. I think that there might
be the clout there. But what we're talking about here
is looking at the small guy on the municipal level or
the individuals who are challenging state laws, and
the ability of individuals that ... we are trying to
protect under ... public policy. I don't think the
chance of getting ... any kind of legislation like
that through for them is very large.
9:09:22 AM
ROBERT SPARKS, testifying on behalf of himself, told the
committee that he is an attorney practicing in Fairbanks. He
shared his background with the committee. He relayed that he
had a client a few years ago who had a driver's licensing issue
with the City of Fairbanks. The client was trying to obtain a
taxicab license and the city was demanding that the person
comply with requirements way beyond the requirements for
obtaining a driver's license. He said his client did not have a
lot of money. Eventually the city agreed to issue the man his
taxicab license. Mr. Sparks indicated that if [SB 86] had been
in place at the time and his client had filed a lawsuit in order
to get the city to comply with state law, there is no way he
would have been able to pay for it. Furthermore, Mr. Sparks
said, "If I was only going to look at getting 20 or 30 percent
of my actual attorney fees and costs back for doing that
lawsuit, there's no way that that person would have been able to
get his ... taxi permit so that he could ... continue earning a
living."
MR. SPARKS opined that SB 86 is shortsighted and has vast,
unforeseen ramifications that would substantially change "the
public justice outcomes in Alaska." He said the proposed
legislation would limit the ability of citizens to make the
state comply with its own law by making those citizens pay 70-80
percent of the actual attorney fees. Mr. Sparks exclaimed that
he thinks that is outrageous. In response to a question from
Chair Seaton regarding pro bono work, said there are many
instances where lawyers do pro bono work for people who don't
have any money. He cited family law cases as one example, and
said he is on the list for Alaska Legal Services to help people
with eviction cases. He indicated that there are already a lot
of pro bono cases taken on. He said:
In this circumstance ... you're talking about trying
to get the state or a municipality to comply with
either ... state [law] or the municipality's own
charter ..., and it doesn't seem to me when you win in
a case like that that it's necessarily punishment for
the municipality or the state to have to pay the
attorney fees that they caused the person to run up to
make the municipality or the state comply with their
own law.
9:13:02 AM
REPRESENTATIVE GRUENBERG asked Mr. Sparks how the legislature
can ensure that the legal system isn't being abused by private
litigants that are just litigating unmeritorious claims against
the government.
9:13:36 AM
MR. SPARKS replied that the legislature is in charge of
appointing the superior court judges and must have faith that
the system is going to work the way it is supposed to work. He
said the system was developed over time and has been in place
for "hundreds of years."
REPRESENTATIVE GRUENBERG, regarding the award of attorney fees
under case law, asked if the courts consider whether the
lawsuits are frivolous or over litigated and if the court and
appellate rules currently provide that kind of protection.
MR. SPARKS answered yes. He said the court rules provide the
judge with great discretion to be able determine what the
attorney fees are, and he said there are some really competent
judges with integrity who follow the law. He noted that Rule 82
has many exceptions regarding the percentage awarded in attorney
fees. Mr. Sparks stated, "If you take away ... having to pay
attorney fees, it reduces the overall incentive for the state
and municipality to exercise reasonable care and take reasonable
action." He offered examples. He said making people pay
consequences for unreasonable actions is a disincentive toward
them taking those actions. He stated, "If you commit a crime,
you're going to have to pay attorney fees for the public
defender, you have to pay court costs, you have to pay fines,
you have to go to jail. I mean, it's the same thing; it should
be the same thing for the state."
9:16:43 AM
CHAIR SEATON talked about recent committee discussion regarding
paperwork in the committee packet showing that litigants are
considered the prevailing party if they succeed on the main
issue. He said the handout cites [Hillman v. Nationwide Mutual
Fire Insurance Company, 855 P.2d 1321, 1324 (Alaska 1993)]. He
asked Mr. Sparks if he is aware if there is a different
standard, so that a public interest litigant could win on a
minor technicality and receive full attorney fees, or if "they
have to do the same thing and prevail on the main issue."
9:17:25 AM
MR. SPARKS offered his understanding that the public interest
litigant would be compensated only for the issues that he/she
wins. He said the public interest litigant has to justify
his/her fee position by filing a motion for attorney fees and a
detailed statement about time spent, work done, and costs, after
which the judge decides if the motion is reasonable. He said he
thinks the judges can be relied upon to do their job.
9:18:30 AM
REPRESENTATIVE GRUENBERG asked if the government can appeal if
the trial court awards attorney fees against the government and
the government feels those fees are too high.
9:18:56 AM
MR. SPARKS answered that in his experience, the government
usually appeals those issues if it believes that the judge has
been unreasonable, and the supreme court is amenable to
reviewing such cases and is critical in its review of the awards
of attorney fees if it believes they are excessive or
unreasonable in any manner.
9:19:16 AM
BARRY DONNELLAN, testifying on behalf of himself, said he is a
lawyer in Fairbanks. He said he has dealt over the years with
private parties dealing with the state, and he said the big
problem lies with the state's law firm, not with the private
litigant. He related having experienced a case in which the
state's law firm spent tens of thousands of dollars defending a
point, only to ultimately contradict the point it had spent so
much money defending. He said his client didn't have any money
and thus couldn't carry the case any further. He stated, "If we
want to save money, what we need to do is instill a little bit
of fiscal responsibility with the state's law firm and not with
the private law firm." He opined that the state's law firm has
no concept whatsoever with fiscal responsibility. He shared
that his experience is that the state's law firm defends the
state even when the state is obviously wrong.
MR. DONNELLAN recommended that the attorney fees to a prevailing
party be increased to 100 percent, not cut back to 20 percent.
He concluded, "I think it is very serious when the state
considers raising the bar against a private citizen raising a
grievance with the state."
9:21:40 AM
MICHAEL W. MacLEOD-BALL, Executive Director, American Civil
Liberties Union (ACLU) of Alaska, testified in opposition to SB
86. In response to Representative Gruenberg's previous question
about frivolous lawsuits, he said the short answer is that
nothing needs to be done. He explained that under the existing
rules, if the attorney is not successful in the case, he/she
does not get an award of attorney fee, and certainly frivolous
lawsuits are not going to be successful.
MR. MacLEOD-BALL stated:
ACLU of Alaska opposes SB 86 on the grounds that it
will have a chilling effect on the ability of parties
acting in the public interest to challenge the
inappropriate exercise of governmental authority. The
bill will tend to widen the legal advantage currently
held by governmental litigants over private
individuals. The ACLU of Alaska, I will say
parenthetically, will be affected, but not as much as
other individuals and nonprofit organizations that
will benefit from the existing rule. The reason for
that is that most of our cases are brought on
constitutional grounds, and most constitutional claims
have separate award of fee provisions in the statute.
But the bottom line here is that if this legislation
is enacted, citizen oversight of government will be
thwarted, and I think that is a bad thing for Alaska
as a whole. The typical plaintiff in a public
interest lawsuit is an individual or a nonprofit
advocacy organization. An atypical defendant in such
a suit is a governmental entity - often the federal or
state government, due to the nature of the issues
commonly litigated. However, your reports clearly
show that the public interest cases are brought just
as regularly against quasi-public or even private
entities. There can be no dispute that the typical
suit hits a party with limited financial resources
that needs to hire outside council against a
governmental or other private entity with access to
substantially greater financial and legal resources.
As often as not, the dispute is over principle, and
very rarely over any substantial amount of money.
Compare this to any other type of litigation. First,
private suits almost involve a fight over money or
property interest. Typically, general civil
litigation pits business against business or
individual against individual. Certainly there are
disparities in each party's ability to cope with the
cost of litigation, but that's a matter of
happenstance. The public interest litigant is
financially disadvantaged and typically does not have
the prospective benefit of a money-damages award. As
a result, attorneys are not readily available to take
on such cases without sizeable retainers; it's simply
not profitable for those attorneys to do so.
Therefore the public interest litigant is legally
disadvantaged, as well, because the governmental
adversary will always have council on board from the
start.
In his letter of transmittal, the governor complains
that the public interest litigant is being subsidized
by the current system of attorney fee reimbursement,
but bear in mind that the public interest litigant
only receives reimbursement if "A," he or she is
acting in the public interest, and "B," he or she is
successful in showing that the government acted
wrongly, unlawfully. On the other hand, the
government gets its subsidy from the taxpayer whether
it wins or not. It's not as if the individual within
the government who caused the government to violate
that victim's rights is made to reimburse the tax
payers for the internal cost of running the government
in a manner violative of the public interest.
9:25:24 AM
MR. MacLEOD-BALL continued his testimony as follows:
The key is to set up a system that does not reward
improper behavior, and there will be no incentive for
the government to stop unlawful action if there is no
one willing to speak out against such action through
public interest legal action. Who will this bill
affect? It will affect those in our society least
able to afford it - the poor, the uneducated, the
minorities, the disabled, the elderly - all of whom
have benefited from public interest litigation at one
time or another, many of whom would not have been able
to bring such actions in their own right. It won't
make a difference to the wealthy individual who funds
the public interest lawsuit. For such individuals,
attorney fee reimbursement is not a significant
consideration. Rather this law will discourage
normal, everyday people and small nonprofit
organizations from trying to make a difference when
they see the government failing to do its job. If
this bill becomes law, the state government will be
able to rest easier that it can act against the public
interest, because it will be less likely to be held to
account for its wrongful actions.
MR. MacLEOD-BALL said he believes that the committee has
examined the two-thirds vote for the court rule change; however,
he suggested that it might be appropriate to wait for the
supreme court to rule on the pending case before taking further
legislative action "that would further muddy the waters." He
noted that there appears to be an exception in SB 86 for eminent
domain cases; fees can be awarded in such cases. He questioned
why eminent domain cases are made an exception, while other
unlawful acts by the government are not. He listed other
unlawful acts, and asked, "Who's to say that a property taking
is somehow worthy of fee reimbursement and is somehow superior
to all these other very legitimate claims?"
MR. MacLEOD-BALL noted that a gentleman named Ken Jacobus had
wished to testify, but had to leave. He reported that Mr.
Jacobus had asked him to relay his opposition to the bill for
the reason that "this will affect not just ... organizations on
the left, but also organizations on the right and in the
middle." Mr. MacLeod-Ball told the committee Mr. Jacobus has
represented conservative organizations on a fairly regular basis
in public interest litigation actions.
9:28:05 AM
MR. MacLEOD-BALL summarized that SB 86 is presented as if the
government is unfairly required to pay for a vengeful
individual's lawsuit against the state, and he opined that
nothing could be further from the truth. This bill will simply
make it harder for someone who's acting in the public interest
to force the government to comply with its legal obligations.
9:28:57 AM
REPRESENTATIVE GATTO mentioned the article entitled, "Governor
aims at legal fees," copied from an unknown source on a handout
in the committee packet. In the article, Representative Gatto
said, ["Chris Kennedy, state assistant attorney general"] is
quoted as having noted that "Alaska is the only state that
awards repayment of all legal fees to winning litigants." He
asked if that is accurate and, if so, how it transpired that
Alaska stands alone among 50 states.
9:29:31 AM
MR. MacLEOD-BALL [began to answer, but due to technical
difficulty the teleconference connection was cut off abruptly
and he could no longer be heard].
The committee took an at-ease from 9:30:29 AM to 9:32:27 AM.
9:32:28 AM
CHAIR SEATON asked Mr. MacLeod-Ball to repeat his answer for the
record.
9:32:57 AM
MR. MacLEOD-BALL said the answer is complicated because each
state has slightly different rules. For example, some states
have a greater number of statutes that award attorney fees. He
said in almost all states the courts have discretion to award
attorney fees, but some courts will interpret their discretion
somewhat more broadly than others. Mr. MacLeod-Ball stated his
belief that Alaska is the only state that follows the rule that
says as a matter of course the losing party pays a portion of
the winning party's fee. He stated the reason for that is to
discourage frivolous lawsuits. He added, "Beyond that there can
be sanctions ... awarded, as well."
9:34:01 AM
REPRESENTATIVE GARDNER said she would like a copy of Mr.
MacLeod-Ball's testimony in writing, if available.
9:34:16 AM
CHAIR SEATON made the same request of all the testifiers.
9:34:25 AM
REPRESENTATIVE GRUENBERG offered his understanding that
Rule 82(b)(3) "puts some sidebars on, among other things,
frivolous suits." He said he is not certain whether that
subsection applies in the public interest arena, but asked Mr.
MacLeod-Ball, "Would you have any problems with making sure that
that does apply so that the rule would explicitly say that ...
the court can take into consideration if the lawsuit is
frivolous?"
9:35:20 AM
MR. MacLEOD-BALL answered that he would have no problem with
that. He stated, "Our practice is not to file a lawsuit unless
we are very confident we're going to win."
9:35:56 AM
KARI ROBINSON, Legal Advocacy Project (LAP) Director/Project
Attorney, Alaska Network on Violence & Sexual Assault (ANVSA),
testified in opposition to SB 86. She relayed:
We were a successful public interest litigant back in
1997, and we were forced to sue the Alaska court
system to ... properly implement the 1996 Domestic
Violence Act. So, here we were challenging to
actually have the legislative mandate in statute
properly enforced. So, I want to echo that a small
nonprofit does not take on litigation like that
without serious consideration. We would never file a
frivolous lawsuit; it's a huge investment of staff
time, and we really consider ... what the public
impact of the litigation is.
I also want to echo that this bill would affect people
in our society who are least likely to protect their
rights. We're talking about victims of domestic
violence and sexual assault, ... the poor, minority
groups, the disabled, and the elderly. If this bill
passed, it would severely limit our ability as a
nonprofit to take action for victims' rights in
similar types of litigation ... as we did back in
1997.
9:38:15 AM
REPRESENTATIVE LYNN asked Ms. Robinson for an example of the
type of case in which ANVSA might get involved in suing the
state as a public interest litigant.
9:38:41 AM
MS. ROBINSON offered more details regarding the aforementioned
case from 1997. She explained that the court system refused to
put all three types of protective orders on the state court
form, which meant that a victim could not request all forms of
relief that the legislature had mandated by statute. After
trying for over a year to negotiate with the court system,
ANDVSA finally had to file suit. Ms. Robinson said ANDVSA kept
costs down by doing much of the work in house and was lucky to
have an attorney work for the nonprofit organization for reduced
fees. She said the case was won, and she stated her belief that
had ANDVSA not filed that suit, victims today would not have all
three types of protective orders available to them on the court
forms.
9:39:55 AM
CHAIR SEATON asked Ms. Robinson if ANDVSA "put in" for the
attorney fees as they had been incurred at the reduced levels or
if they were requested at a higher level.
9:40:18 AM
MS. ROBINSON said ANDVSA requested those fees at the level at
which they were incurred, which was at a reduced rate. She said
the fees for that litigation, which lasted at least a year, were
$19,000. In response to a question from Chair Seaton, she
confirmed that the court decided to award the actual attorney
fees. She said it was a hardship for ANDVSA to come up with the
reduced fees, because the nonprofit organization has limited and
restricted funding. She concluded, "So, litigation such as this
would really limit our ability."
9:41:02 AM
REPRESENTATIVE LYNN asked Ms. Robinson if ANDVSA's public
interest litigant prevailed on all elements of the litigation or
just some.
9:41:08 AM
MS. ROBINSON replied that there were three elements in the case,
all three of which were won. Two of them became mute, she said,
when the court system agreed to make changes, but the third and
primary issue, which was to list all three types of protective
orders on the court form, was won through litigation.
9:42:18 AM
MS. ROBINSON, in response to a question from Representative
Gruenberg, explained that there are a number of factors that the
court looks at in determining "whether or not you're a public
interest litigant." She said, "It's not ... simply by the issue
that you're bringing to the court." She listed the four factors
that the court considers, which are to decide whether or not:
the case is designed to affect strong public policies; numerous
people will receive benefits from the suit if the plaintiff
succeeds; only a private party can have been expected to bring
the suit; and the purported public interest litigant has
sufficient economic incentive to file suit - even if the action
involved only narrow issues lacking general importance.
9:43:18 AM
CHAIR SEATON mentioned the Dansereau v. Ulmer case and said the
committee had heard testimony that a court may also determine
that apportionment is appropriate because a litigant raised
certain issues that were frivolous. He asked Ms. Robinson if
she is familiar with that case or was made aware that some
frivolous suits can reduce the award.
9:43:37 AM
MS. ROBINSON responded that she is not familiar with that case.
9:44:28 AM
CHAIR SEATON closed public testimony.
9:44:36 AM
MR. RUARO recollected that Representative Gatto had made a
comment that the public interest litigant doctrine is an
aberration among the 50 states. He concurred with that
estimation. He said, "Any other states that do provide recovery
of enhanced attorney fees do handle that by statute, and ...
we're suggesting that this legislature can do that very same
thing." Regarding the apportionment issue, he noted that public
interest litigants under Dansereau can prevail on one issue -
one item - and recover full attorney fees. He offered an
example of when that has happened. In response to a request
from Chair Seaton, he said he would provide to the committee
information pertaining to the court cases.
9:46:32 AM
MR. RUARO referred to Mr. MacLeod-Ball's testimony that
something needs to be in place that imposes a penalty on parties
for bringing a frivolous or losing suit, and he said under the
public interest litigant doctrine the loser doesn't pay
anything. He recalled testimony that characterized the types of
plaintiffs that bring these cases as being ordinary, everyday
people and individuals with a lack of funds. He stated, "While
that may be the case in some instances, I think if you look at
Ms. Taylor's February 17 Legislative Report, I think to your
office, most of the entities listed in there are organizations,
environmental groups, ACLU, and I would suggest to you that ...
some of those organizations at least have more than ample funds
and don't ... fit the image that was painted for the public
interest litigants. In response to Mr. MacLeod-Ball's mention
of eminent domain as an exception, he stated, "That's in current
statute, and that's why it would still stand." Mr. Ruaro
disagreed with a former testifier's characterization of the
Department of Law as not being competent, revealing that he had
worked eight years in private practice and sees the attorneys in
the department as highly specialized.
9:48:37 AM
CHAIR SEATON reminded Mr. Ruaro that the opinions expressed by
those testifying are not necessarily the opinion of the
committee, even if they are not challenged by the committee. He
said there had been testimony imparting that full attorney fees
would be paid in relation to "challenging on constitutional
grounds." He said he does not see that in SB 86.
9:49:01 AM
MR. RUARO said that exception is in House Bill 145, which is "up
on appeal right now."
CHAIR SEATON asked if that exception is for the recovery or the
payment of the fee.
MR. RUARO said he believes it is for the recovery.
9:49:23 AM
CHAIR SEATON said, "But we're passing a piece of subsequent
legislation now, without the exception for enhanced recovery
fees for constitutional grounds. So, as I see it, this
subsequent legislation will be precedent over previous
legislation." He asked if that is correct.
9:49:52 AM
MR. RUARO said he believes that is incorrect. He directed
attention to page 2, lines 4-6, which read:
(c) This Act does not preclude the enactment of,
nor create an implied repeal of, specific statutes
authorizing awards of attorney fees in particular
situations, such as in AS 45.50.537.
MR. RUARO indicated that the language includes enhanced attorney
fee awards, "so that it dovetails in that regard."
9:50:08 AM
REPRESENTATIVE GARDNER said Mr. Ruaro had given an example of a
case in which the plaintiff lost on several points, won on one
point, but received full attorney fees. She asked if that is
standard, and if there could be other cases in which someone
could lose on several points, win on one point, and get partial
fees.
9:50:24 AM
MR. RUARO responded that the standard for nonpublic interest
litigants is that they have to be the prevailing party on the
main issue in the case, whereas public interest litigants merely
need to prevail on a single issue in the case to receive payment
of full attorney fees for all issues.
9:52:25 AM
REPRESENTATIVE GRUENBERG, regarding Mr. Ruaro's defense of the
department's attorneys, suggested that [the attorneys working
for] the State of Alaska have far more resources than any
litigant that they are up against.
MR. RUARO, although agreeing that the state as an entity has a
significant amount of resources, said he wouldn't label those
resources as unlimited.
CHAIR SEATON reopened public testimony to allow someone to
testify whose name previously had not been noticed on the sign
up sheet.
9:52:57 AM
KAY ROLLISON, testifying on behalf of herself, told the
committee about a case that she had to "take on" a couple years
ago that was against organized labor. Luckily, she said, there
were a couple of attorneys that were willing to work on
contingency fees. If it had not been for the "loser pays"
requirement, she said, she would never have had the ability to
take that case on. She related that just knowing she has a
right to bring a case against any person or entity not
fulfilling the obligations specified by law keeps her "in the
process." Ms. Rollison suggested that if the proposed
legislation passes, there would be nothing "to keep it from
sliding over into the private sector also, so that those same
contingency fees would be limited to a certain amount, and then
... I'd have no way to defend myself in that arena either." She
concluded:
When it comes to principle, when it comes to
integrity, and it comes to my staying connected to how
we run this state, if you pass this bill, you've just
cut my legs right out from under me. I personally ...
have concerns with things that are going on in our
legislature, things that are going on in our
government, and I may well be one of those public
litigants.
And with respect to your nonprofits and how they play
into it: Okay, I'm single, I'm by myself, ... I have
some small savings, but if I had a case - if I had
something that I just was willing to risk everything
for - I would probably have to ... look for some
nonprofit that might be interested in taking ... my
case [and be] willing to help me, because at least
they have ... some way of helping me present that
case.
... My plea to you is to please keep this process as
it is. It's scary even as it is, but ... I think it's
incredibly untimely that this particular piece of
legislation is brought up. You might be thinking that
you're defending yourself or looking out for some big
money-bag, nonprofit group from outside ... or inside
the state, but I'm not one of those, and I've used
this process, at least ... on the private side, and I
may well use it on the public side.
9:57:44 AM
CHAIR SEATON closed public testimony.
CHAIR SEATON announced that SB 86 was heard and held.
HB 461-LEGISLATIVE DISCLOSURES
9:58:23 AM
CHAIR SEATON announced that the last order of business was HOUSE
BILL NO. 461, "An Act relating to disclosure to the Alaska
Public Offices Commission of information about certain income
received as compensation for personal services by legislators,
public members of the Select Committee on Legislative Ethics,
and legislative directors subject to the provisions of law
setting standards of conduct for legislative branch officers and
employees; and providing for an effective date."
9:58:24 AM
REPRESENTATIVE ELKINS moved to adopt the proposed committee
substitute (CS) for HB 461, Version 24-LS1656\Y, Wayne, 4/7/06,
as a work draft. There being no objection, Version Y was before
the committee.
9:58:47 AM
REPRESENTATIVE GARDNER, as sponsor of HB 461, addressed the
changes made in Version Y, which were in response to the
committee's concerns stated during the last hearing. She said
one concern had been in regard to the meaning of personal
services. She stated that the phrase, "personal services" is
defined not only as consulting or contract work, but also as
employment. Thus, if a legislator is employed by someone and,
as a result of that employment, receives a W2 form, then that
employment would also have to be described under Version Y. She
added, "It previously had to be disclosed, but now we have to
say what it is."
9:59:58 AM
CHAIR SEATON said he thinks that was one of the main issues that
was discussed at a prior hearing on HB 461. He said, "I don't
think that was the intent of your bill." He asked, "Have you
been able to work out that issue yet?"
10:00:04 AM
REPRESENTATIVE GARDNER answered yes. She clarified, "The
existing language using 'personal services' meets my desire as
well as [the Alaska Public Offices Commission's (APOC's)]
understanding of what the intent is, which is that all income
should be disclosed with some description, not just consulting
or contracting ...." Representative Gardner said if the income
is earned as a result of a job for which a person is licensed,
for example a pilot or hairdresser, than that could be enough
description in and of itself.
REPRESENTATIVE GARDNER said another question that had been
addressed was whether a person would have to state how many
hours he/she intends to work. She offered her understanding
that APOC had a problem with that, because of its concern about
reporting what has happened. She said her own concern is that
"you can have income for work you're going to do over a course
of time - some of which you've already done and some of which
maybe you haven't." She said she thinks APOC is now comfortable
with retaining the language, shown on page 2, [beginning on]
line 11, which read:
(B) the approximate total number of
hours that have been spent or will be spent performing
the services; and
REPRESENTATIVE GARDNER noted that Chair Seaton had questioned
the issue of dividend income and wanted that to be included.
She said that language is on page 2, [beginning on] line 4, and
read as follows:
as to a dividend received from a limited liability
company as compensation for personal services,
REPRESENTATIVE GARDNER noted that the language on page 2, lines
14-16, "IF THE SOURCE OF INCOME IS KNOWN OR REASONABLY SHOULD BE
KNOWN TO HAVE A SUBSTANTIAL INTEREST IN LEGISLATIVE,
ADMINISTRATIVE, OR POLITICAL ACTION", was not fully
understandable and not meaningful to APOC, thus, it would be
deleted. She explained, "When you accept money, as a
legislator, you don't always know whether the source of that
money may, during the time of your service, come before the
legislature in any way."
10:03:07 AM
CHAIR SEATON asked if the issue regarding employment being
included within the definition of personal services had been
resolved.
10:03:18 AM
REPRESENTATIVE GARDNER answered yes. She said that is in
current definition and is both recognized and understood.
10:03:32 AM
BROOKE MILES, Executive Director, Alaska Public Offices
Commission (APOC), confirmed that personal services would
include regular employees of a company, as well as people who
receive compensation on a contractual basis. She said that in
discussions with Representative Gardner's staff, APOC was "set
at ease with respect to that." She said, if a person's job
title was not descriptive enough, a person who is a regular
employee would have the option of attaching his/her job
description. She reminded the committee that APOC's primary
concern with the original version of HB 461 was that it may not
have a "bright enough line about who would be required to
provide some additional description outside of" [his/her job
title alone]; however, she said APOC is feeling much more
comfortable about the language in Version Y.
MS. MILES expressed particular appreciation for the deletion of
the aforementioned language [on page 2, lines 14-16]. She said,
"If a person indicated that they had more than $5,000 of
employment, but didn't show the amount, our only really clear
guideline to request an audit was if we knew the company
retained a lobbyist, because of course the lobbying law is
within our purview as well." She said that subjective language
was confusing both to the filer and to the public. She
concluded, "If the intent is that legislators are held to this
higher level of disclosure - in that [if] their personal
services ... are more than $5,000 they also disclose the amount
- how much simpler to just have that stated plainly in law?"
10:07:09 AM
MS. MILES, in response to a question from Chair Seaton, said
APOC does not see any further problems in the bill.
Furthermore, she stated for the committee's knowledge, "Once a
CS of this nature is read across the floor, we would be revising
our fiscal note to a zero fiscal note."
10:07:43 AM
REPRESENTATIVE GRUENBERG moved to report CSHB 461, Version 24-
LS1656\Y, Wayne, 4/7/06, out of committee with individual
recommendations and the accompanying fiscal notes. There being
no objection, CSHB 461(STA) was reported out of the House State
Affairs Standing Committee.
ADJOURNMENT
There being no further business before the committee, the House
State Affairs Standing Committee meeting was adjourned at
10:08:00 AM.
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