Legislature(2001 - 2002)

03/20/2002 01:44 PM Senate JUD

Audio Topic
* first hearing in first committee of referral
+ 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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