Legislature(2001 - 2002)
03/20/2002 01:44 PM Senate JUD
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
HB 362-EXTEND BOARD OF GOVERNORS OF AK BAR ASSN
MS. DEBORAH O'REGAN, Alaska Bar Association, informed members
that an audit of the Alaska Bar Association (ABA) by the
Legislative Budget and Audit (LBA) division last year found the
ABA meets the public need in an effective and economical manner.
The ABA deals with licensing of attorneys. HB 362 reflects the
recommendation of the LBA to extend the Board of Governors for
another four years.
MR. STEVE VAN GOOR, Alaska Bar Association, said he was available
to answer any questions about the audit.
MS. AMY ERICKSON, staff to Representative Murkowski, sponsor of
HB 362, agreed the legislation extends the sunset date of the
Board of Governors to June 30, 2006. The Board of Governors was
established in 1955 to ensure that only qualified members of the
legal profession of good moral character are allowed to practice
law in the state. She urged members to support the legislation.
VICE-CHAIR DONLEY noted a conflict of interest as he is a member
of the Alaska Bar Association. He then noted the ABA is running a
deficit this year and expressed concern about the cost of ABA
dues as that cost is one of the highest in the nation. He
questioned what plan the ABA has to bring down the cost of
membership.
MS. O'REGAN said, unfortunately, one of the things that affected
the ABA's budget last year was an Alaska Supreme Court mandate
that the ABA provide a voluntary CLE program. It encouraged
attorneys to report a minimum of 12 hours of CLE credits each
year. ABA's budget deficit was due to the increased cost of
temporary staff, data processing, computer programming, and
discounts taken by lawyers. Another large expenditure in 2001 was
for an ABA convention held in Ketchikan, the first in 22 years.
She noted the convention will be held in Anchorage this year so
it will not be quite as expensive. She said that membership in
only half of the bar associations across the country is
mandatory; membership in Alaska's is mandatory. She pointed out
the ABA last increased its dues in 1992; the prior increase
occurred in 1981.
VICE-CHAIR DONLEY remarked that there was a virtual revolution
within the California Bar Association over dues. He strongly
encouraged Ms. O'Regan to do everything possible to keep the
costs down. He then noted with no further testimony, he would set
HB 362 aside.
HB 362-EXTEND BOARD OF GOVERNORS OF AK BAR ASSN
SENATOR THERRIAULT expressed concern about the fact that the
Board of Governors of the Alaska Bar Association (ABA) has
amassed a sizeable fund, about $1 million, from attorney fees. He
said he questions its operations as it is completely off budget.
He noted there are dueling legal opinions as to whether "that is
being done right or wrong." He noted that other licensing boards
have state oversight to make sure that members are not being
over-assessed. He questioned whether the Board of Governors
cannot cover its annual costs and is living off of that fund, and
whether that fund prevents the state and members from knowing
what the legitimate annual expenses are.
MR. STEVE VAN GOOR, ABA counsel, said he has been employed by the
ABA since 1983 and, while his responsibilities are primarily on
the disciplinary side, he is aware that since 1983 the Board of
Governors has been very concerned about the expenses it has
incurred and that it fulfill its statutory requirements for the
addition and character examination of attorneys, discipline of
attorneys, and continuing legal education. During the 1970s and
early 1980s, the ABA's dues were $165. The early 1980s were a
time of high inflation and economic instability so the Board,
with the input of the membership, decided that in order to
continue to provide services mandated by the court and
statutorily, it must raise fees to $310. The Board expected the
dues increase to last three or four years during the high
inflationary period. He said Board members are very concerned
about the cost and expenses; the annual budget is the topic of
the October board meeting. Regarding accountability, the board's
budget is available for member review and the Legislative Budget
and Audit division has the opportunity to look over the ABA's
shoulder every four years. LBA has determined the ABA's fiscal
management is appropriate.
VICE-CHAIR DONLEY commented that, typically, LBA does not go into
the nuts and bolts of how the ABA spends its money. It does an
overview of the ABA' public policies. The fact that LBA
recommended extending the board does not necessarily mean it
agreed with how the board operates.
SENATOR THERRIAULT stated, having dealt with the budgets of other
licensed professions, there is a connection between the level of
expenditures by the boards that is felt immediately in membership
fee increases because other boards are not allowed to amass funds
over a couple of years. He maintained the ABA says its large fund
balance will enable the board to cover increased operational
costs. He questioned whether those increased costs are
inflationary or whether they are for activities the members might
not approve of or know of until fees increase again. He commented
that there is no immediate connection between the fees members
pay and what the board spends the money on that year and that
concerns him.
VICE-CHAIR DONLEY said that if some of the fee increases resulted
from mandates by the judicial branch, the ABA could develop a
bifurcated rate with a higher rate for judges' licensing fees.
SENATOR COWDERY moved to amend HB 362 to change the board's
extension to June 30, 2004 rather than 2006.
VICE-CHAIR DONLEY noted that, without objection, the amendment
was adopted.
SENATOR COWDERY moved SCS HB 362(JUD) from committee with
individual recommendations.
VICE-CHAIR DONLEY announced that without objection, the motion
carried. He then announced the committee would take a short
recess.
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