Legislature(2013 - 2014)CAPITOL 106
01/31/2013 08:00 AM House STATE AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| HB75 | |
| HB10 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 75 | TELECONFERENCED | |
| *+ | HB 10 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 10-EXEC ETHICS: LEGAL FEES/FAMILY TRAVEL
8:47:46 AM
CHAIR LYNN announced that the final order of business was HOUSE
BILL NO. 10, "An Act authorizing state agencies to pay private
legal fees and costs incurred by persons exonerated of alleged
violations of the Alaska Executive Branch Ethics Act; allowing
certain public officers and former public officers to accept
state payments to offset private legal fees and costs related to
defending against complaints under the Alaska Executive Branch
Ethics Act; and creating certain exceptions to limitations under
the Alaska Executive Branch Ethics Act on the use of state
resources to provide or pay for transportation of spouses and
children of the governor and the lieutenant governor."
8:48:08 AM
TED MADSEN, Staff, Representative Max Gruenberg, Alaska State
Legislature, presented HB 10 on behalf of Representative
Gruenberg, sponsor. He said HB 10 would set into statute "much
of the substance of some attorney general regulations regarding
the [Alaska] Executive Branch Ethics Act that were promulgated
... back in December of 2009." He explained that Representative
Gruenberg disagreed with the procedures within two regulations.
The first issue had to do with 9AAC 52.045, which addresses
transportation expenses of family members of the governor and
lieutenant governor. Mr. Madsen explained that currently minor
children are the only ones whose travel costs can be reimbursed,
but the sponsor thinks it is appropriate to include any child of
the governor or lieutenant governor who is dependent upon the
care of his/her parents because of, for example, a physical,
mental, or developmental disability - even if the child is over
the age of 19.
CHAIR LYNN said theoretically that could include a child of the
governor or lieutenant governor who is 35 years of age.
MR. MADSEN answered that is correct.
8:50:51 AM
REPRESENTATIVE KELLER asked if current regulation prohibits
coverage of travel costs for "a minor child who is dependent and
becomes an adult."
MR. MADSEN cited 9 AAC 52.045 (d)(2), which defines family
member as "a spouse or minor child of the governor or lieutenant
governor".
CHAIR LYNN offered his understanding that HB 10 would increase
coverage from a minor child to a mentally or physically disabled
adult child of the governor or lieutenant governor.
MR. MADSEN confirmed that is correct.
REPRESENTATIVE KELLER ventured that just because it is not
covered under regulation does not mean coverage of the travel
cost of a dependent adult child of the governor or lieutenant
governor would be prohibited. He described a scenario in which
a former governor of the state becomes dependent on his children
for care, and under HB 10 "a senior citizen would still not
qualify." He questioned how big the value of HB 10 would be.
8:53:02 AM
MR. MADSEN relayed that the sponsor believes it would be unfair
to unnecessarily keep the governor's or lieutenant governor's
family from [traveling together] when there is a child in the
family who is dependent upon his/her mother or father for care.
He directed attention to the stipulations related to travel cost
reimbursement in Section 3, page 3, lines 19-31. For example,
[as shown on lines 28-29] he stated that the event must be "a
family-oriented or youth-oriented event at which the person's
attendance is particularly appropriate".
CHAIR LYNN suggested one example might be participation in the
Special Olympics.
MR. MADSEN concurred.
REPRESENTATIVE KELLER said he realizes that. He stated his
belief that because there is no prohibition, the executive
branch could pay for travel as it sees fit; therefore, he
questioned the necessity of the proposed legislation.
8:55:46 AM
REPRESENTATIVE MAX GRUENBERG, Alaska State Legislature, as
sponsor of HB 10, told Representative Keller that he is correct
that currently there is nothing that prevents the executive
branch from "doing what they're doing." However, he said he
thinks it is better policy to give the oversight to the
legislature, which appropriates the money and is a different
branch of government.
8:57:22 AM
REPRESENTATIVE KELLER opined that the spirit of the current
regulation is meant to be "a little general."
8:57:47 AM
REPRESENTATIVE GRUENBERG clarified his intent was to follow the
same parameters as the regulation. He reiterated that the
question is: Who decides? He said he thinks it is appropriate
for the executive branch not to make policy regarding its own
travel arrangements.
8:58:34 AM
REPRESENTATIVE GATTIS stated that if she was the governor, she
would want to know what the rules are before making travel
arrangements. She said she thinks she can see both sides, but
wants to know if currently there are rules to guide a governor
who may want to travel with a child.
REPRESENTATIVE GRUENBERG clarified that there are rules in
regulation currently; the only difference is that under HB 10,
adult disabled children would be included.
9:00:15 AM
REPRESENTATIVE ISAACSON posited that HB 10 would help to rectify
an issue that needs to be clarified. He said it is not good
policy for the executive branch to ignore the legislature's
statutory authority. He said he likes what the proposed
legislation would do to clarify this issue, especially in terms
of when a child's care is customary and needed, so that the
child is not split apart from the family when the family is
trying to follow the letter of the law.
9:02:16 AM
REPRESENTATIVE KELLER clarified that he never meant to suggest
that statute could be ignored by the executive branch. He
stated, "The line between what's statute and what's law is a
difficult one and a subjective one to draw." He said the
question is how far [the legislature] can go in specifying
policy in statute.
CHAIR LYNN pointed out that the question is not regarding whom
the governor can bring along when traveling, but who pays for
those people.
9:03:57 AM
MR. MADSEN, in response to comments made by Representative
Hughes and the sponsor, offered clarification by citing the
language in AAC 52.045(c), which read as follows:
(c) For purposes of AS 39.52.120(a) and (b)(3), the
use or authorization of use of state money or other
state resources for transportation of a family member
that does not benefit the state is presumed
insignificant if the governor or lieutenant governor
pays the state the cost of the family member's
transportation. Except for transportation by state
aircraft for partisan political purposes under AS
39.52.120(f), the agency that authorized or paid for
the travel shall determine the cost of the
transportation based on either
(1) the actual fare paid; or
(2) the fare for equivalent commercial
transportation, if the travel was by state aircraft,
vessel, or vehicle.
9:07:35 AM
JUDY BOCKMON, Assistant Attorney General; State Ethics Attorney,
Opinions, Appeals, & Ethics Section, Civil Division (Anchorage),
Department of Law (DOL), in response to Representative Keller,
offered a brief overview of the code of conduct set up through
the Alaska Executive Branch Ethics Act. She said regulations
have been adopted over time to provide additional parameters
with respect to certain portions of the statute. In response to
the chair, she said the Alaska Executive Branch Ethics Act
applies primarily to someone in the executive branch of
government while he/she is actively in service
9:10:59 AM
CHAIR LYNN directed attention to the following language in the
bill title, on line 3: "allowing certain public officers and
former public officers".
MS. BOCKMON responded that both the regulations and the proposed
legislation recognize the possibility that a former state
officer could be the subject of an ethics complaint for conduct
while in office, and the attorneys' fee provision covers that
individual. She said the regulation and the proposed statute do
not cover a former employee's violation of one of those
provisions that apply after he/she leaves state service.
9:12:09 AM
REPRESENTATIVE GRUENBERG directed attention to language in
Section 5, on page 5, lines 5-9, which read:
*Sec. 5. The uncodified law of the State of
Alaska is amended by adding a new section to read:
APPLICABILITY. AS 39.52.470, enacted by
sec.4 of this Act, applies only to complaints under AS
39.52l.310 - 39.52.390 that are initiated or filed on
or after the effective date of this Act.
REPRESENTATIVE GRUENBERG stated, "That's talking about the
attorneys' fees. The transportation would apply to applications
that are made after the effective date; there's no retroactivity
clause."
9:12:53 AM
REPRESENTATIVE KELLER offered his understanding that HB 10 is
looking at policy decisions regarding regulation that is already
in place. He suggested that the committee needs to hear the
rest of the presentation.
9:13:45 AM
REPRESENTATIVE GRUENBERG clarified that the first part of the
proposed legislation would adopt the regulations in statute,
"except for the developmentally disabled kid." He offered his
understanding that Representative Millett would be offering an
amendment. He said she has sponsored legislation, which he has
cosponsored, in support of the developmentally disabled
community, and he indicated a change in phrase is needed from
"mental disability" to "intellectual" or "developmental
disability".
9:15:07 AM
REPRESENTATIVE ISAACSON moved to adopt Amendment 1, labeled 28-
LS0040\A.2, Wayne, 1/30/13, which read as follows:
Page 3, line 12:
Delete "or mental"
Insert ", intellectual, or developmental"
There being no objection, Amendment 1 was adopted.
9:15:47 AM
REPRESENTATIVE GRUENBERG directed attention to Section 4 of HB
10, on page 4, line 7, through page 5, line 4, which addresses
the ability for any person in the executive branch who is
exonerated to recoup his/her cost in attorneys' fees in
defending against an ethics complaint. He stated that under
current regulation, the person can apply and receive payments
before they are exonerated; under HB 10, the person would have
to wait until he/she is exonerated. He said that is the normal
practice in the state. He opined that if money is awarded in
advance, the person may not prevail, and then he/she has to be
chased down to get the money back, which is "unseemly" and "a
waste of time."
9:18:51 AM
REPRESENTATIVE KELLER asked at what point a person could begin
to accumulate a legal debt because of a complaint.
9:19:39 AM
MS. BOCKMON answered that when a complaint is first received,
the department does a preliminary review and analysis to
determine whether it states appropriate Ethics Act claims and
warrants investigation. If the department decides to formally
accept the complaint, then statute requires that the subject of
the complaint is notified, and the investigation would proceed.
She said most investigations are resolved at some level of the
investigatory phase; however, statute provides for more formal
accusation that might lead to a hearing. She shared that her
experience has shown that most subjects do not immediately hire
an attorney when they are served with a complaint, unless the
circumstances are serious. She said, "If it got to the public
accusation phase without otherwise resolving, I would expect
most folks would hire an attorney - but maybe not."
9:21:40 AM
MS. BOCKMON, in response to a question from Representative
Hughes regarding possible costs to the state, explained that the
fiscal note is zero, because under [HB 10], neither the
transportation costs nor the attorneys' fees would impact the
Department of Law. She said the Office of the Governor has an
administrative account that is addressed in the budget and
appropriations process every year, and the transportation costs
are covered within that funding. She offered her understanding
that the attorneys' fees are covered through the Division of
Risk Management, in the Department of Administration (DOA), and
the DOA provides the fee payments through interagency
assessment; therefore, if there was a particular person subject
to an ethics complaint who chose to avail him/herself of the
attorneys' fees benefit, that would be addressed through the
Division of Risk Management and that particular person's agency.
MS. BOCKMON, in response to a request from Representative Hughes
regarding historical information, said there are instances where
state employees are the subject of various complaints - not just
ethics complaints. She said she is not fully educated on all
the parameters in which a defense might be provide in whatever
the law suit is. In addition to Ethics Act proceedings, she
said, there are also other proceedings, which can make a
conflict challenge or bring a complaint under the hearing
officers' procedures, for example. The regulations for the
Ethics Act have been in place only since December 2010. She
offered her understanding that to date there has been no one
seeking reimbursement of attorneys' fees costs. She recollected
two significant matters involving attorneys, and in both
instances the individual was not exonerated. She said there may
have been one smaller complaint that was dismissed where an
attorney was involved; however, she said she is not aware that
there have been any requests for reimbursement of attorneys'
fees since the regulation went in to effect.
9:26:02 AM
REPRESENTATIVE HUGHES asked if there is any statutory limit in
what would be paid to attorneys' fees.
MS. BOCKMON replied that in August 2009, the Division of Risk
Management set a cap of $25,000 per proceeding, regardless of
the number of claims made. She offered her understanding that
the division set that as policy, and said, "I don't see a
citation to ... another authority."
9:27:39 AM
REPRESENTATIVE KREISS-TOMKINS offered his understanding that HB
10 would change when attorneys' fees are paid out, not how; a
person would be paid back his/her attorneys' fee costs only
after being exonerated.
9:28:14 AM
CHAIR LYNN offered his understanding that under HB 10, the
person who had been exonerated or the Division of Risk
Management would be reimbursed.
9:28:34 AM
REPRESENTATIVE GRUENBERG answered that is correct. In response
to Representative Hughes' previous questions, he said the
general rule for fiscal notes is that they are viewed only in
terms of the effect of the bill. The only effect of HB 10, he
said, is "an unknown amount, which will ... potentially save the
state money," because it will protect against a circumstance
where a person is reimbursed for the attorneys' fees and
subsequently is not exonerated. He opined that a zero fiscal
note is very appropriate, because under HB 10, nothing would be
changed but to ensure that a person is not paid erroneously.
REPRESENTATIVE GRUENBERG directed attention to language
beginning on page 4, line 31, to page 5, line 4, which he said
does not set an amount for attorney's fees, but outlines that
those fees must be reasonable, related to the cost of legal
representation, and necessarily incurred.
CHAIR LYNN said "reasonable" is in the eyes of the judge.
REPRESENTATIVE GRUENBERG said that is correct. He said this
pertains to regulation 9 AAC 52.040(d)(2), which read:
(2) expenses are reasonable if, based on an evaluation
of the complexity of the alleged claim, the attorney's
fee or hourly rate, the hours expended, the
relationship between the amount of work performed and
the significance of the alleged claim, and other
relevant factors, the expenses were necessarily
incurred to defend against an allegation in a
complaint brought under AS 39.52.310 - 39.52.390;
those expenses may
(A) include attorney's fees, fees incurred for
professional legal services customarily performed by
an attorney but delegated to and performed by an
investigator, paralegal, or law clerk, and related
costs; and
(B) be apportioned by alleged violation if a complaint
alleges more than one violation, but only if the
public officer provides clear documentation that the
expenses paid were limited to the alleged violation
for which the public officer is exonerated; and
REPRESENTATIVE GRUENBERG stated, "We didn't go into that detail
in statute, because that's covered in the [regulations]."
9:33:00 AM
REPRESENTATIVE KELLER asked if it is the norm in other states to
have no money paid until after exoneration from an ethics
complaint. He posed the possibility that ethics complaints can
be used as a tool in the toolbox of various organizations. He
continued as follows:
For example, a political organization puts out the
word and says, "Okay, we've got to have lots of
complaints filed." That may or may not have an effect
on the AG, but we know that the ... media is involved
at a different level than what it normally is in the
courts, and this becomes a matter of public opinion,
you know, then that ... can affect the results of what
happens with the ... next ethics complaint.
REPRESENTATIVE KELLER expressed his concern that HB 10 can be
used as a political tool. Further, he questioned whether it is
appropriate to remove the option that the executive branch would
have of protecting an employee that may have become a political
target. He offered his understanding that the passage of HB 10
would "prevent that kind of coverage." He asked if the
executive branch would have the option of "putting the money out
there ... to help protect its employees" if the proposed
legislation does not pass.
9:36:12 AM
REPRESENTATIVE GRUENBERG responded that the practice before any
litigation came about was like that in criminal law where there
was no reimbursement for anything, but worse because there is no
public attorney appointed to represent the defendant in an
ethics case. He said neither the public defender nor the Office
of Public Advocacy have any statutory provision that allows them
to represent "these folks." He opined that when former Governor
Palin was hit with litigation, that brought people's attention
to "the fact that there should be some method of dealing with
this." He said the AG decided not to provide a public attorney
for the defendant, but to provide a method of reimbursing a
private attorney for the reasonable amount of the fee. Even
under the Alaska Legislative Branch Ethics Act, there would be
no one to defend legislators, he said, but "fortunately that
hasn't happened."
REPRESENTATIVE GRUENBERG, regarding the question about fairness,
said it is possible that the person upon whom the ethics
complaint was filed could incur considerable expense; however,
he said he thinks the chance of not being exonerated is much
greater. He echoed Ms. Bockmon's statement that most of the
cases are handled in house and do not require the attorneys'
fees. He said he thinks the issue of vexatious litigation goes
beyond the scope of HB 10.
9:42:45 AM
REPRESENTATIVE KELLER asked the bill sponsor if he thinks HB 10
would "expand the potency potential of vexatious complaint."
REPRESENTATIVE GRUENBERG responded that he does not think the
proposed legislation would have any effect on vexatious
litigation.
9:43:55 AM
CHAIR LYNN said it seems that there are two separate bills in HB
10. He reviewed that the first part of the proposed legislation
deals with the governor or lieutenant governor being able to do
what should be done for a disabled child of any age. He
questioned whether the two parts of the bill belong together.
9:44:29 AM
CHAIR LYNN, after ascertaining that there was no one else who
wished to testify, closed public testimony.
9:44:48 AM
CHAIR LYNN stated his support for the first part of HB 10, and
said the second part raises a lot of questions that merit more
discussion.
9:45:24 AM
REPRESENTATIVE GATTIS offered her understanding that testimony
has shown that frivolous ethics complaints are exposed, which
she said addresses her concern that a person would not have to
shell out the money to cover attorneys' fees for a frivolous
complaint and get reimbursed later. Regarding a nonfrivolous
ethics complaint, wherein the person has to hire his/her own
attorney, she stated, "Our constituents have to do the same
thing, and I think they're looking at us to have the same
rules."
9:46:43 AM
REPRESENTATIVE ISAACSON said the bill sponsor has pointed out
that the intent of HB 10 is not to address the issue of
vexatious litigation; however, he estimated that the bill would
notify the plaintiff that if he/she makes it through the
executive branch ethics process, he/she will not bleed the
governor's funds, because if the governor prevails, then the
governor will be reimbursed. He suggested perhaps the situation
with former Governor Palin was that people tried to "bleed her
dry." He stated, "That is not what we want our executives to
have to endure." He concurred with the chair that HB 10 may be
two bills in one, but stated his support of both aspects of the
proposed legislation, because it would provide "clear
instructions to all involved."
9:48:41 AM
REPRESENTATIVE KREISS-TOMKINS offered his understanding that
with vexatious complaints; it is the complainant that will "pay
through the nose" when his/her complaint is found to be
meritless. He added, "It's just a question of when." He opined
that the second part of HB 10 is logical and merely aligns "when
that money is paid out for executive branch people with members
of the general public."
9:49:40 AM
CHAIR LYNN reiterated his previous remarks about the complexity
of the second part of the proposed legislation.
CHAIR LYNN announced that HB 10 [as amended] was held over.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 1 HB0075A.pdf |
HSTA 1/31/2013 8:00:00 AM |
HB 75 |
| 2 HB 75 sponsor statement.pdf |
HSTA 1/31/2013 8:00:00 AM |
HB 75 |
| 3 HB 75 About Pick.Click.Give.pdf |
HSTA 1/31/2013 8:00:00 AM |
HB 75 |
| 4 HB 75 Alaska Statute 43.23.062.pdf |
HSTA 1/31/2013 8:00:00 AM |
HB 75 |
| 5 HB 75 IRS Form 990 for tax-exempt organizations.pdf |
HSTA 1/31/2013 8:00:00 AM |
HB 75 |
| 6 HB 75 Letters of Support.pdf |
HSTA 1/31/2013 8:00:00 AM |
HB 75 |
| 7 HSTA Research HB 75 1-24-2013 13-157.pdf |
HSTA 1/31/2013 8:00:00 AM |
HB 75 |
| 8 HB075-DOR-PFD-01-30-13.pdf |
HSTA 1/31/2013 8:00:00 AM |
HB 75 |
| 1 HB 10 v. A.pdf |
HSTA 1/31/2013 8:00:00 AM |
HB 10 |
| 2 HB 10 Sponsor Statement for v. A.pdf |
HSTA 1/31/2013 8:00:00 AM |
HB 10 |
| 3 HB 10 Sectional Analysis for v. A.pdf |
HSTA 1/31/2013 8:00:00 AM |
HB 10 |
| 4 HB 10 Legal Opinion - Exec. Ethics.pdf |
HSTA 1/31/2013 8:00:00 AM |
HB 10 |
| 5 HB 10 Regulations 9 AAC 52-040.pdf |
HSTA 1/31/2013 8:00:00 AM |
HB 10 |
| 6 HB 10 Regulations 9 AAC 52-045.pdf |
HSTA 1/31/2013 8:00:00 AM |
HB 10 |
| 7 HB010-LAW-CIV-01-25-13.pdf |
HSTA 1/31/2013 8:00:00 AM |
HB 10 |