Legislature(2005 - 2006)BUTROVICH 205

05/08/2006 09:00 AM JUDICIARY

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09:06:54 AM Start
09:07:14 AM HB316
09:38:31 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved CSHB 316(JUD) Out of Committee
                    ALASKA STATE LEGISLATURE                                                                                  
              SENATE JUDICIARY STANDING COMMITTEE                                                                             
                          May 8, 2006                                                                                           
                           9:06 a.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Senator Ralph Seekins, Chair                                                                                                    
Senator Charlie Huggins, Vice Chair                                                                                             
Senator Gene Therriault                                                                                                         
Senator Hollis French                                                                                                           
Senator Gretchen Guess                                                                                                          
MEMBERS ABSENT                                                                                                                
All members present                                                                                                             
COMMITTEE CALENDAR                                                                                                            
CS FOR HOUSE BILL NO. 316(JUD)                                                                                                  
"An Act extending the termination date for the Board of                                                                         
Governors of the Alaska Bar Association; and providing for an                                                                   
effective date."                                                                                                                
     MOVED CSHB 316(JUD) OUT OF COMMITTEE                                                                                       
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: HB 316                                                                                                                  
SHORT TITLE: EXTEND BOARD OF GOVERNORS ABA                                                                                      
SPONSOR(s): REPRESENTATIVE(s) STOLTZE, GRUENBERG                                                                                
01/09/06       (H)       PREFILE RELEASED 12/30/05                                                                              
01/09/06       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/09/06       (H)       JUD, FIN                                                                                               
04/26/06       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
04/26/06       (H)       Heard & Held                                                                                           
04/26/06       (H)       MINUTE(JUD)                                                                                            
05/04/06       (H)       JUD AT 3:00 PM CAPITOL 120                                                                             
05/04/06       (H)       DETENTION /I.D. OF PERSONS;CONTEMPT OF                                                                 
05/05/06       (H)       FIN AT 8:30 AM HOUSE FINANCE 519                                                                       
05/05/06       (H)       <Pending Referral>                                                                                     
05/05/06       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
05/05/06       (H)       -- Rescheduled from 05/04/06 --                                                                        
05/06/06       (H)       JUD RPT CS(JUD) 4DP                                                                                    
05/06/06       (H)       DP: COGHILL, WILSON, KOTT, MCGUIRE                                                                     
05/06/06       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
05/06/06       (H)       -- Meeting Canceled --                                                                                 
05/07/06       (H)       FIN RPT CS(JUD) 6DP 4NR                                                                                
05/07/06       (H)       DP: HAWKER, FOSTER, JOULE, KERTTULA,                                                                   
                        STOLTZE, MEYER;                                                                                         
05/07/06       (H)       NR: WEYHRAUCH, HOLM, MOSES, CHENAULT                                                                   
05/07/06       (H)       TRANSMITTED TO (S)                                                                                     
05/07/06       (H)       VERSION: CSHB 316(JUD)                                                                                 
05/07/06       (H)       FIN AT 12:00 AM HOUSE FINANCE 519                                                                      
05/07/06       (H)       Moved CSHB 316(JUD) Out of Committee                                                                   
05/07/06       (H)       MINUTE(FIN)                                                                                            
05/07/06       (S)       READ THE FIRST TIME - REFERRALS                                                                        
05/07/06       (S)       JUD                                                                                                    
WITNESS REGISTER                                                                                                              
Representative Bill Stoltz                                                                                                      
Alaska State Capitol                                                                                                            
Juneau, AK 99801-1182                                                                                                           
POSITION STATEMENT:  Introduced HB 316                                                                                        
Pat Davidson. Legislative Auditor                                                                                               
Legislative Audit Division                                                                                                      
PO Box 113200                                                                                                                   
Juneau, Alaska 99811                                                                                                            
POSITION STATEMENT: Answered questions regarding HB 316                                                                       
Theresa Obermeyer, Attorney                                                                                                     
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Commented on HB 316                                                                                      
ACTION NARRATIVE                                                                                                              
CHAIR  RALPH   SEEKINS  called  the  Senate   Judiciary  Standing                                                             
Committee meeting to  order at 9:06:54 AM.  Present were Senators                                                             
Hollis French, Charlie Huggins,  Gene Therriault, Gretchen Guess,                                                               
and Chair Ralph Seekins.                                                                                                        
              HB 316-EXTEND BOARD OF GOVERNORS ABA                                                                          
9:07:14 AM                                                                                                                    
CHAIR RALPH SEEKINS announced CSHB 316(JUD) to be up for                                                                        
REPRESENTATIVE BILL  STOLTZ, sponsor, introduced the  bill. House                                                               
Bill 316 would  extend the sunset date of the  Board of Governors                                                               
of the Alaska Bar Association until June 30, 2007.                                                                              
9:09:58 AM                                                                                                                    
SENATOR HOLLIS  FRENCH asked Representative Stoltz  to articulate                                                               
some of the issues concerning the Board.                                                                                        
REPRESENTATIVE  STOLTZ responded  that  the issue  of Alaska  Bar                                                               
dues merits  scrutiny and  further discussion,  which constitutes                                                               
the reason for  only extending the sunset  one-year. The original                                                               
bill version  asked for  a three-year  extension. Also  there are                                                               
innumerable issues within the Alaska Bar that need attention.                                                                   
9:11:50 AM                                                                                                                    
SENATOR GENE  THERRIAULT said he  has been contacted by  a number                                                               
of attorneys who expressed concern regarding the Bar dues.                                                                      
REPRESENTATIVE  STOLTZ said  he has  heard that  many times.  The                                                               
dues are among the highest in the country.                                                                                      
9:13:20 AM                                                                                                                    
PAT DAVIDSON, Legislative Auditor, offered to answer questions.                                                                 
SENATOR THERRIAULT  advised Ms.  Davidson that he  was interested                                                               
in the  fund balance and  hearing her  opinion on whether  or not                                                               
the  Alaska  Bar Association  should  be  brought under  a  state                                                               
MS. DAVIDSON responded  that at the end of 2004  the fund balance                                                               
was $2.7  million dollars. $676,000  was designated by  the Board                                                               
of Governors as the working  capital. $120,000 was designated for                                                               
asset  acquisition and  $1.9 million  is  shown as  undesignated,                                                               
however of that,  $1.1 million is in the lawyers  fund for client                                                               
With regard to  its legal status, that was some  debate when they                                                               
developed recommendations  in the  report. One  recommendation is                                                               
for the Bar Association to go to mandatory legal education.                                                                     
9:16:07 AM                                                                                                                    
During the course  of the audit, Legislative  Research issued the                                                               
idea of keeping  the revenues and expenditures out  of the budget                                                               
process. There are many arguments  on both sides. The Association                                                               
has approximately an $800,000 surplus  in the fund balance, which                                                               
represents half  a year funding. Title  8 says that the  fees are                                                               
supposed  to support  the  cost of  the Board  and  a 50  percent                                                               
surplus is slightly high.                                                                                                       
CHAIR  SEEKINS   asked  Ms.  Davidson  to   explain  what  client                                                               
protection means.                                                                                                               
MS. DAVIDSON advised  there is a client protection  fund for when                                                               
clients feel  their funds  have been  misused by  attorneys. They                                                               
can appeal to the Bar Association for refund.                                                                                   
9:18:59 AM                                                                                                                    
CHAIR SEEKINS asked whether that fund shows any activity.                                                                       
MS. DAVIDSON advised  there were $72,000 in claims  award made in                                                               
CHAIR SEEKINS asked whether she knew the five-year average.                                                                     
MS.  DAVIDSON offered  to  do the  research  and provide  further                                                               
details to the committee.                                                                                                       
CHAIR SEEKINS speculated that the fund was over reserved.                                                                       
9:20:22 AM                                                                                                                    
SENATOR THERRIAULT asked Ms.  Davidson whether updating equipment                                                               
or expanding office space was involved in any of the funds.                                                                     
MS. DAVIDSON  noted they  have an  asset acquisition  of $120,000                                                               
CHAIR  SEEKINS  asked  the  amount  of money  that  is  spent  on                                                               
[MS. DAVIDSON referred to the audit packet]                                                                                     
SENATOR  THERRIAULT commented  that  the Senate  did  not file  a                                                               
companion bill on  the subject and that the issue  of whether the                                                               
Bar should  have legislative  review or  control has  been around                                                               
for  years. He  speculated whether  The Alaska  State Legislature                                                               
should consider  a total shut  down and recreation of  the Alaska                                                               
Bar Association in order to "take  care of the problems." He said                                                               
it should be considered.                                                                                                        
9:24:39 AM                                                                                                                    
MS.  DAVIDSON  responded  to  the  earlier  budget  question  and                                                               
advised that  $262,000 was  expensed on  the category  of "annual                                                               
meeting and others" in 2004.                                                                                                    
SENATOR CHARLIE HUGGINS  asked how a person would  get invited to                                                               
one of their meetings.                                                                                                          
SENATOR FRENCH responded  one would have to join the  Bar and pay                                                               
the dues.                                                                                                                       
CHAIR SEEKINS asked the amount of the dues.                                                                                     
SENATOR FRENCH  offered that he  recently wrote a check  for $550                                                               
to cover the yearly dues.                                                                                                       
SENATOR HUGGINS suggested organizations  that are flush with cash                                                               
could help  a lot of people  if they were to  contribute to needy                                                               
organizations such as "victim's rights."                                                                                        
9:26:05 AM                                                                                                                    
CHAIR  SEEKINS said  many  attorneys suggest  that  the dues  are                                                               
high, the  parties are lavish,  the Association  is over-reserved                                                               
in funds and  yet they do not want any  legislative oversight. He                                                               
suggested that the  Legislature should raise the  subject of "Bar                                                               
control" at another time.                                                                                                       
9:27:19 AM                                                                                                                    
TERESA OBERMEYER, Attorney, regretfully  relayed her opinion that                                                               
the Alaska Bar Association is  steeped in favoritism. She pledged                                                               
to help improve  that factor. She charged that  discipline in the                                                               
Bar Association  was a complete  failure and used the  example of                                                               
former  Attorney  General Greg  Renkes.  She  referenced the  550                                                               
licensed Alaska  attorneys who are  active out of state  and said                                                               
the  overwhelming  majority  of  them have  never  even  been  to                                                               
Alaska. The  rate of passage  of the Alaska  Bar is less  than 60                                                               
percent and  she suggested  that Alaska  attorneys should  have a                                                               
fairer chance to pass and practice law in state.                                                                                
CHAIR  SEEKINS closed  public testimony.  He  clarified that  the                                                               
bill  would  extend  the  termination   date  for  the  Board  of                                                               
Governors to  June 30,  2007 and  at that time  it would  begin a                                                               
"wind down" process, which would take one year.                                                                                 
SENATOR  THERRIAULT agreed  and  asked Ms.  Davidson whether  the                                                               
Legislature  would have  the authority  to move  the sunset  date                                                               
forward  next year  and initiate  the wind  down process  earlier                                                               
than June 30, 2007.                                                                                                             
MS. DAVIDSON said she did not know.                                                                                             
9:34:03 AM                                                                                                                    
CHAIR SEEKINS  speculated that  the Legislature  could accelerate                                                               
the wind down process if they were creating a new entity.                                                                       
SENATOR THERRIAULT agreed.                                                                                                      
SENATOR GRETCHEN GUESS asked Representative  Stoltz to comment on                                                               
the discussion.                                                                                                                 
REPRESENTATIVE  STOLTZ responded  that either  route would  bring                                                               
the issues to  the forefront. He deferred to the  decision of the                                                               
SENATOR   FRENCH  moved   CSHB  316(JUD)   from  committee   with                                                               
individual recommendations and attached  fiscal notes. Hearing no                                                               
objections, the motion carried.                                                                                                 
There being  no further  business to  come before  the committee,                                                               
Chair Seekins  recessed the meeting to  the call of the  chair at                                                               
9:38:31 AM.                                                                                                                   

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