Legislature(1999 - 2000)
02/21/2000 08:59 AM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
MINUTES
SENATE FINANCE COMMITTEE
February 21, 2000
8:59 AM
TAPES
SFC-00 # 33, Side A and Side B
CALL TO ORDER
Co-Chair Sean Parnell convened the meeting at approximately
8:59 AM.
PRESENT Co-Chair John Torgerson, Co-Chair Sean Parnell,
Senator Al Adams, Senator Dave Donley, Senator Gary Wilken,
Senator Phillips and Senator Green.
Also Attending:
BARBARA RITCHIE, Deputy Attorney General, Civil Division,
Office of the Attorney General, Department of Law; DEAN
GUANELI, Chief Assistant Attorney General, Legal Services
Section, Criminal Division, Department of Law; KATHRYN
DAUGHHETTE, Director, Administrative Services Division,
Department of Law
SUMMARY INFORMATION
SB 250-APPROPRIATIONS: CAPITAL/SUPP/REAPPROP
The Committee heard from the Department of Law on
judgements and claims requiring a supplemental
appropriation. The bill was held.
SENATE BILL NO. 250
"An Act making and amending capital, supplemental, and
other appropriations and reappropriations; making a
reappropriation under art. IX, sec. 17(c),
Constitution of the State of Alaska, from the
constitutional budget reserve fund; making
appropriations to capitalize funds; ratifying certain
expenditures; and providing for an effective date."
DEPARTMENT OF LAW
BARBARA RITCHIE, Deputy Attorney General, Civil Division,
Office of the Attorney General, Department of Law began the
presentation.
AT EASE 9:01 AM / 9:02 AM
Stephen Kilpper v. State Of Alaska, Department of Revenue,
Child Support Enforcement Division Dennis P. James, Esquire
Ms. Ritchie told the Committee this case went to the Alaska
Supreme Court and the total amount of attorney fees and
costs is $765.30. Interest on this amount by June 30, 2000
will bring the total to $845.44. She noted the intent is to
pay all of the claims before June 30 and avoid some of the
interest costs.
Ms. Ritchie explained this cost is a standard award of
attorney's fees of $500 as awarded by the Alaska Supreme
Court. The $245 balance, she said, is "costs".
Ms. Ritchie gave complete details of the case and shared
that it was a paternity disestablishment case that
addressed two primary issues. One issue is whether Mr.
Kilpper was liable arrears that predated the
disestablishment of paternity. She said the Supreme Court
ruled in favor of CSED's argument that biological
parenthood is not the only basis on which a court can
impose a duty of support. She stated that the
acknowledgment of parenthood made him legally bound to
support the child up to the point of the DNA test precluded
his duty of support.
The second issue is whether the trial court should have
held a hearing before granting CSED motion to reduce the
arrears to judgement. Ms. Ritchie said the CSED did not
prevail with the court ruling that a hearing should have
been held. She said this involved an interpretation of
statutes.
Ms. Ritchie assured the Committee that in the future the
division would not oppose the hearing and would remind the
court of the necessity for such a hearing.
Ms. Ritchie said the Department of Law included with the
request, a recommendation to the Committee suggesting
clarification of the two pertaining statutes to make them
consistent with the civil rules.
Co-Chair Parnell asked if the Department of Law had taken
action to encourage the governor or legislature to
introduce legislation to address this matter. Ms. Ritchie
answered this recommendation is the only action taken.
Timothy P. DuFresne v. State Of Alaska, Department of
Revenue, Child Support Enforcement Division Hughes Thorness
Gantz Powell Huddleston and Bauman
Ms. Ritchie stated that is also a disestablishment of
paternity case. The judgement represents $3,060 of the
attorney fees and $3000 prejudgment issue. With interest
calculated to June 30, 2000 the total is $6459.12.
Ms. Ritchie told the Committee that this case also involves
the interpretation of statutes, but they are different
statutes than the previous case.
Ms. Ritchie said the original claim was for the full
$15,000 of incurred attorney fees but that the court ruled
the plaintiff is only entitled to 20 percent under civil
rules.
Ms. Ritchie gave complete details of the case that involved
a paternity by estoppel argument and a paternity by laches
argument noting that a different Supreme Court decision
affected the outcome of disestablishment of paternity.
Ms. Ritchie noted that the plaintiff was refunded the child
support payments collected from him, which were stored in
escrow.
Ms. Ritchie stated that the Department of Law again
recommends the statutes be clarified to avoid similar
inconsistency in the future.
Co-Chair Parnell explained the supplemental budget process
for the benefit of visitors in the audience.
Ms. Ritchie noted that Child support enforcement cases are
the most complex issues because they affect people's lives.
Co-Chair Parnell noted the change in procedure to obtain
funding from the legislature. Through the efforts of
Senator Donley, a new questionnaire was written that, when
completed by the Department of Law, provides detail on the
settlement.
DEAN GUANELI, Chief Assistant Attorney General, Legal
Services Section, Criminal Division, Department of Law
presented the next two criminal cases.
Cleary v. Smith Perkins Coie
Mr. Guaneli said this is the last portion of the attorney
fees for the women plaintiffs of the lawsuit. He explained
that the females were treated separately in this lawsuit
because their complaints were somewhat different.
Mr. Guaneli told the Committee that the Department of
Corrections converted the Highland Mountain facility into
an all-female prison and this took care of the issues
involved in the woman's portion of the lawsuit.
Mr. Guaneli stated that the $12,528.84 attorney's fee was a
modest cost for monitoring the department's efforts to
comply with the court order for a year.
Hines v. Cooper; Hines v. Armstrong; Hines v. Kincheloe;
Hines v. Massey; Hines v. Brew United States District
Court, District of Alaska on behalf of John J. Hines
Mr. Guaneli explained this is an unusual situation where
the plaintiff, who is a state inmate, has filed multiple
lawsuits. This payment settles five lawsuits at once.
Mr. Guaneli told of the repercussions the plaintiff
suffered as a result of turning fellow inmates in for
various offences despite the department's efforts to
protect him. Mr. Guaneli stated that the plaintiff is
currently housed in a private facility out of state and is
scheduled for release soon.
Mr. Guaneli said the state, in this case, agreed to pay the
plaintiff's filing fees for the lawsuits filed against his
different attackers.
Senator Donley asked why question five of the questionnaire
was not completed, "Any recommendations concerning cases of
this type in the future?" Mr. Guaneli responded that this
is such an unusual circumstance where the plaintiff
informed on other prisoners in every facility he was
housed. He said the Department of Corrections is confident
that it protects inmates who inform on other inmates in all
other circumstances.
Native Village of Venetie IRA Council et al. v. State of
Alaska Alaska Legal Services Corporation
Ms. Ritchie told the Committee that this case has a long
history and the settlement represents attorney's fees and
costs of trial work done in federal district court relating
to a tribal adoption case. The total amount is $407,546.13.
After June 30, 2000, the interest accrued will bring the
amount up to $450,539.83.
Ms. Ritchie detailed the case, which had a co-plaintiff of
Fort Yukon. She said it involved a birth certificate that
the state refused to issue because the Village of Fort
Yukon already issued a birth certificate. She spoke of "The
List" issued by the federal government identifying
recognized Native villages.
Ms. Ritchie gave details on the correlation to the Venetie
tax case, which has become known as the Indian Country
case. She told of how the two cases were combined for much
of the process. She noted that the state prevailed in the
tax case but lost the adoption case.
Ms. Ritchie stated that the sum of the fee would be paid to
the Alaska Legal Services Corporation (ALSC), who
represented in the adoption case. She said the state is not
paying any costs associated with the tax portion of the
case.
Co-Chair Torgerson asked if the ruling would have been
different without the Fort Yukon present on "the list". Ms.
Ritchie answered it would have been.
Senator Adams noted that in the previous year, a
supplemental appropriation was given to fund the Venetie
case and asked why this amount wasn't included in that
bill. Ms. Ritchie responded this portion of the settlement
was not decided by that time. She spoke of the time
involved in reaching this settlement.
Senator Donley referred to federal legislation governing
ALSC's fees. He asked why this claim was made to recover
ALSC fees from the state. Ms. Ritchie replied these costs
were incurred before the federal legislation was
implemented and therefore, the state was liable. She noted
another case in the supplemental request also falls under
the same provision but that there should be no more in the
future.
Senator Wilken referred to page four of the backup and
wanted to know how the state could be held liable for
violation of civil rights on a matter related to birth
certificates. Ms. Ritchie responded that by the state not
recognizing the tribal adoption, the court held that the
violation of that law constituted as a violation of
constitutional rights. She agreed it is a difficult issue
with regards to civil rights.
Senator Donley found it more ironic that the state
originally funded the ALSC who filed the lawsuit and that
the state was again required to pay the ALSC.
Senator Adams commented about the supplemental funds
appropriated to the Department of Law to fight the Village
of Venetie on tax issue.
Senator Phillips wanted to know who was the "state" in this
situation, the Department of Law or the CSED. He referred
to the Court's statement ".the state should determine on
adoption.". Ms. Ritchie said it is the Bureau of Vital
Statistics under advice from the Department of Law.
There was further discussion between Senator Phillips and
Ms. Ritchie on the quality of advice given by the
Department of Law on this case.
Tape: SFC - 00 #33, Side B 9:47 AM
Senator Green wanted to know if the department was
satisfied with the accounting as stipulated in question
number four, "Did we challenge plaintiff's request for
costs and fees or in other ways seek to reduce the costs to
the state? If so, describe to what extent we were
successful." Ms. Ritchie replied she was satisfied because
she knew the effort put into the case. Senator Green wanted
to make sure the claim did not include extra costs or costs
associated with the tax portion of the case. Ms. Ritchie
assured her it did not.
Larry Coffman v. State Of Alaska Clifford, Lyons and Garde
Ms. Ritchie explained this was a whistle blower law case
that the state settled. She said Mr. Coffman alleged the
state did not hire him as an electrical engineer because he
was a whistle blower at Alyeska Pipeline. She noted there
was a great deal of findings involved in this case.
Ms. Ritchie stated the $155,000 settlement is inclusive of
attorney's fees and costs and represents one year of back
pay and $60,000 for attorney's fees. She talked about the
judge assigned to the case and his recommendation of a
settlement.
Senator Donley asked what state employee made the decision
not to hire Mr. Coffman and if the employee is still
employed by the state. Ms. Ritchie said she did not know
and that the matter should probably not be discussed in an
open meeting forum.
Co-Chair Parnell asked if the matter needed to be addressed
in an executive session because it is a personnel matter.
He asked if the witness knew whether the employee was still
employed. Ms. Ritchie did not and she also did not know who
that employee was. She talked about the decision to hire
based on the qualifications.
Senator Donley felt that the plaintiff must have had good
cause since the judge recommended settlement close to the
amount of the original request of $200,000. He wanted to
know who was the state employee.
Ms. Ritchie spoke of efforts to educate the Department of
Labor and Workforce Development on federal whistle blower
laws and hiring procedures.
Senator Donley felt that was a good step but he believed
the employee needs to be held accountable. He wanted to
know if the individual has received any sanctions.
Co-Chair Parnell asked whether the settlement was subject
to appropriation. Ms. Ritchie said it is based on
appropriation.
Co-Chair Parnell asked the status of the case and if any
summary motions had been filed. Ms. Ritchie responded that
motions had been filed but not decided before the
settlement was reached. She referred to the Newton case
from the previous year saying this is a similar case.
Senator Donley wanted accountability from the Department of
Law and understood the necessity of going into an executive
session to deal with the personnel matter.
Co-Chair Parnell requested more detailed information on the
status of the state employee responsible for the decision
not to hire the plaintiff.
Ms. Ritchie agreed and it was determined that some of the
information could be provided since it is already part of
public record.
Senator Wilken was not as interested in names as much as
procedure. He wanted detailed information with names
blacked out. He wanted to know if the individual had done
this before, if any action was taken against him or her,
etc.
Senator Donley said that would be acceptable to him. He
stated he wanted to be assured that reasonable action was
taken to prevent a similar situation in the future.
Senator Green asked when the hiring event occurred. Ms.
Ritchie did not know.
Timothy Wrightson v. State Of Alaska, Department of
Revenue, Child Support Enforcement Division Ken Kirk
Ms. Ritchie said this was a child support enforcement case,
resulting from an administrative appeal, with the state
owning $880.25, or with interest, $952.96. She stated that
the court awarded $750 in attorney fees, which was half of
the original request plus costs to Mr. Wrightson's
employer. She explained the Child Support Enforcement
Division (CSED) calculated the plaintiff's child support
obligations based on his earnings over the last five years.
The plaintiff challenged that, arguing that only his
current earnings, which had decreased over time, should be
considered, according to Ms. Ritchie. She said the
plaintiff also argued that the hearing examiner should have
considered the issues relating to different child custody
laws in the State of Kansas where the child resides, even
if the plaintiff did not raise those concerns during the
hearing. The court agreed that the hearing examiner should
have made those considerations and that the division should
have calculated child support under the exceptional
circumstance guidelines.
Ms. Ritchie told the Committee that the Department of Law
is working with the CSED to ensure hearing examiners "bend
over backwards" for pro se litigants. She believed that the
hearing examiner in this case did not know about Mr.
Wrightson's defenses. Ms. Ritchie spoke about the offer Mr.
Wrightson had made to the State of Kansas that was rejected
and the length of time the State of Kansas took to bring
the paternity action and action for child support.
State Of Alaska, Department of Revenue, Permanent Fund
Dividend Division v. Joan Hale and Joan Hale v. State of
Alaska, Department of Revenue, Permanent Fund Dividend
Division
Ms. Ritchie explained this item is the automatic award of
$1000 by the Supreme Court for attorney's fees plus $105 in
costs and $2,276.88 in attorney's fees and costs at the
superior court level. With interest, the total of both
cases equals $4,349.16.
Ms. Ritchie stated that this was a case of whether the
plaintiff should be allowed a permanent fund dividend while
out of state because of her spouse's military service. Ms.
Ritchie said two Superior Court rulings, one on the Zyler
case and the other being this Hale case were inconsistent
in their determination. At the time, she said, the
Department of Revenue followed the Zyler decision, which
ruled that spouses could no longer piggyback on allowable
absences of their spouse.
Ms. Ritchie noted that since the time of these cases, the
legislature amended the statute to specifically allow the
piggyback. Therefore, she said this question should not
come up again.
Co-Chair Torgerson asked the interest rates on the last
three claims. He noted that some were 10.5 percent and
others 7.5 percent.
KATHRYN DAUGHHETTE, Director, Administrative Services
Division, Department of Law responded that the Wrightson
case is 7.5 percent and the Hale is 10.5 percent.
Fair Business Practices
Ms. Daughhette spoke to the request in Section 11 of SB
250. She told the Committee that the Department of Law
received $180,000 in statutory designated program receipts
for FY00.
Ms. Daughhette stated the department has been working on
the Carrs/Safeway merger and that the stores are refunding
the department for costs incurred. She noted the
reimbursement amount would exceed the amount of statutory
designated program receipts appropriated because the
department anticipates expanding efforts in this area using
the same fund source. She detailed the costs incurred in
the Carrs/Safeway merger for the economist total
approximately $100,000. She said the supplemental request
is for $40,000.
Ms. Daughhette next addressed Section 11 (b) of SB 250,
lapse date extensions, noting that the Department of Law
will withdraw that request because both the House and
Senate finance committees will include those appropriation
in the FY01 operating budget.
Senator Adams asked how much would lapse. Ms. Daughhette
answered approximately $156,000 in medical procedures will
lapse. She was unable to predict how much of the tort
reform amount would lapse, but said it would be
insignificant.
Senator Donley asked if the Department of Law was handling
the settlement by the University of Alaska for claims
associated with the climbing accident. Ms. Ritchie said the
department was not involved and the University would be
making a separate presentation on their supplemental
request.
Co-Chair Parnell referred to Senator Donley's comment about
the state funding organizations that file litigation
against the state and then the state being charged again
for the suit costs. He spoke of a case he saw in private
practice. He wanted to know if the Department of Law had
looked at the big picture.
Ms. Ritchie said the department had not and she clarified
that the entities the legislature funds has no interest to
the Department of Law.
Senator Donley asked Ms. Ritchie to find out specific
information relating to the University of Alaska climbing
accident case.
Senator Donley asked if the cases brought before the
Committee today and included in the supplemental were the
only ones. Ms. Ritchie said she learned of three more that
just happened. She said one addressed a Department of
Natural Resources land sale, another addressed an
employment case and the third is a child support
enforcement case. She predicted that the total of those
cases would be $280,000 plus interest.
Senator Phillips told of an incident in Eagle River between
the state and the Municipality of Anchorage where he had to
tell the Department of Law that it would cost more if the
matter were taken to court than it would cost to fix. He
said he called the Department of Law and threatened that he
would not vote for the appropriation to fight the case. He
asked the witness what is the internal process for
determining which cases are feasible to pursue.
Ms. Ritchie responded that there is a lot of ongoing
litigation handled by the Department of Law. She stressed
that professional staff is making those decisions all the
time. She detailed the considerations given to each
situation.
Senator Wilken revisited the Venetie case stressing that he
is trying to understand how the state violated any civil
rights or committed a willful act. "I'm looking for the
'harm' that came to the plaintiff that would cause the
state, some ten years later, to be asked to pay the
attorney's fees." He believed all parties went into this
with "eyes wide open" and that there was a legitimate legal
question to be determined. He thought if the children were
harmed it was because parents chose to have a village birth
certificate rather than one issued by the State Of Alaska.
Ms. Ritchie gave details of the birth certificate and
tribal adoption process.
Ms. Ritchie suggested providing the Committee with the
court decisions that explain why the court made its finding
and also to prepare a summary for Senator Wilken's benefit.
She said the basis for the ruling was that children have
rights under the Child Indian Act.
Senator Wilken stated that all he is looking for is "who
was harmed."
Co-Chair Parnell requested that the witness prepare the
summary and provide the court decisions.
ADJOURNED
Senator Parnell adjourned the meeting at 10:28 AM.
SFC-00 (12) 02/21/00
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