Legislature(1999 - 2000)
04/27/1999 01:55 PM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
April 27, 1999
1:55 P.M.
TAPE HFC 99 - 106, Side 1
TAPE HFC 99 - 106, Side 2
CALL TO ORDER
Co-Chair Therriault called the House Finance Committee
meeting to order at 1:55 p.m.
PRESENT
Co-Chair Therriault Representative Foster
Co-Chair Mulder Representative Grussendorf
Vice Chair Bunde Representative Kohring
Representative Austerman Representative Moses
Representative J. Davies Representative Williams
Representative G. Davis
ALSO PRESENT
Senator Fred Dyson; Senator Gary Wilken; Bill Church,
Division of Retirement and Benefits, Department of
Administration; Jeff Logan, Staff, Representative Green;
Kevin Jardell, Staff, Representative Green; Darwin Peterson,
Staff, Senator Torgerson; Anne Carpeneti, Assistant Attorney
General, Legal Services Section, Criminal Division,
Department of Law; Janet Seitz, Staff, Representative
Rokeberg; Lauree Hugonin, Executive Director, Alaskan
Network on Domestic Violence and Sexual Assault; Pam
LaBolle, President, Alaska State Chamber of Commerce,
Juneau; Jennifer Rudinger, Executive Director, Alaska Civil
Liberties Union (ACLU); Tom Lakosh, Anchorage;
TESTIFIED VIA TELECONFERENCE
Blair McCune, Alaska Public Defenders Agency; Jennifer
Rudinger, Alaska Civil Liberties Union (ACLU).
SUMMARY
HB 34 "An Act relating to the crime of misprision of a
crime against a child."
HB 34 was HELD in Committee for further
consideration.
HB 176 "An Act relating to attorney fees and costs and
the granting of public interest litigant status in
proceedings related to administrative actions and
inactions; and amending Rules 79 and 82, Alaska
Rules of Civil Procedure, and Rule 508, Alaska
Rules of Appellate Procedure."
HB 176 was REPORTED out of Committee with "no
recommendation and a zero fiscal note by the House
Judiciary Committee, dated 4/22/99.
CSSB 9(HES)
"An Act relating to the calculation of employee
contributions and credited service in the public
employees' retirement system for noncertificated
employees of school districts, regional
educational attendance areas, the special
education service agency, the Alaska Vocational
Technical Center, and the state boarding schools;
and providing for an effective date."
CSSB 9 (HES) was REPORTED out of Committee with a
"do pass" recommendation and with fiscal impact
note by the Department of Administration dated
3/10/99.
HOUSE BILL NO. 34
"An Act relating to the crime of misprision of a crime
against a child."
Representative J. Davies MOVED to ADOPT Amendment 1 (copy on
file). Co-Chair Mulder OBJECTED for the purpose of
discussion. Amendment 1 would add on page 1, line 9
"attempted murder, kidnapping, sexual penetration without
consent, or assault where serious physical injury is
inflicted on a child under 16 years of age, by another."
REPRESENTATIVE FRED DYSON explained that the Department of
Law recommended the amendment. He noted that the age of 16
is arbitrary.
Co-Chair Therriault WITHDREW his objection. There being NO
OBJECTION, it was so ordered.
Representative Foster MOVED to report CSHB 34 (FIN) out of
Committee with the accompanying fiscal notes. Representative
J. Davies OBJECTED for purpose of discussion.
Senator Dyson pointed out that federal legislation would
prevent states from receiving funds under section 106 unless
the Governor certified that the state had a law similar to
HB 34.
Co-Chair Therriault noted that an updated fiscal note is
expected. He observed that the legislation would be held for
the upcoming fiscal note.
HB 34 was HELD in Committee for further consideration.
CS FOR SENATE BILL NO. 9(HES)
"An Act relating to the calculation of employee
contributions and credited service in the public
employees' retirement system for noncertificated
employees of school districts, regional educational
attendance areas, the special education service agency,
the Alaska Vocational Technical Center, and the state
boarding schools; and providing for an effective date."
SENATOR GARY WILKEN, sponsor testified in support of SB 9.
He noted that Representative Brice offered similar
legislation in the previous session. He explained that the
legislation affects noncertificated or classified school
district employees such as custodians, cafeteria workers and
administrative assistants and teachers aides. Under current
law, these employees work nine months a year, which are
contributed to their retirement plans. After 30 years of
service they would have approximately 22 years of retirement
credit. The legislation allows these school employees to pay
into their retirement accounts in order to obtain full year
retirement credit for each year that they work. It has no
cost outside of a one-time $72 thousand dollar startup fee.
The individual employee pays the increased benefit. School
districts across the state have shown support.
In response to a question by Co-Chair Therriault, Senator
Wilken explained that there is no employer match. The
employee would have a 1.25 premium added to their benefit
cost during their nine months of employment. He noted that
it would not affect the university.
BILL CHURCH, DIVISION OF RETIREMENT AND BENEFITS, DEPARTMENT
OF ADMINISTRATION noted that there is no long term cost to
the retirement system. It is structured to leave the extra
component open. The rate can be increased or decreased as
needed based on the actuaries' determination.
Vice-Chair Bunde asked if the legislation represents a one
time opt-in provision and what it would cost an average
employee.
Mr. Church stated that the election to increase the
retirement contribution is irrevocable. There is no cost
outside of the surcharge of an additional 1.4-percent. He
stated that testimony indicated the additional 1.4-percent
surcharge would not be a burden.
Representative Austerman noted that the bill is not
retroactive. Mr. Church stated that the employees could not
buy up past service.
Representative J. Davies questioned why the option would be
irrevocable. Mr. Church stated that it would be difficult to
administer the program if it were not irrevocable. He
stressed that the choice would be a career path that would
allow them to retire at the end of thirty years.
Co-Chair Therriault noted that there is a fiscal note that
would be paid by the retirement system.
Representative Foster MOVED to report CSSB 9 (HES) out of
Committee with the accompanying fiscal note. There being NO
OBJECTION, it was so ordered.
CSSB 9 (HES) was REPORTED out of Committee with a "do pass"
recommendation and with fiscal impact note by the Department
of Administration dated 3/10/99.
HOUSE BILL NO. 176
"An Act relating to attorney fees and costs and the
granting of public interest litigant status in
proceedings related to administrative actions and
inaction; and amending Rules 79 and 82, Alaska Rules of
Civil Procedure, and Rule 508, Alaska Rules of
Appellate Procedure."
JEFF LOGAN, STAFF, REPRESENTATIVE GREEN testified in support
of HB 176. He maintained that the legislation is designed to
take the "kick me sign of our backs." Alaska has a resource
development economy. Resources are disposed for payment to
fund government services. The legislature has developed a
process to protect the public. He maintained that there is a
competent group of people to carry out the administration of
this process. He observed that if a member of the public
finds themselves in opposition to an agency action or in
action then they can challenge the action through the
administrative appeals process. He maintained that people
are being paid by the state to sue the state. He observed
that the court has ruled that some litigation is so
important to the public at large that the public at large
should pay for the litigation. He acknowledged the merit of
the court's assumption, but stressed that the court has let
the people of Alaska pay for specific questions. The
legislation would change state policy to require plaintiffs
against the state to pay for their own lawyers.
Representative J. Davies asked the criteria for establishing
public interest status.
KEVIN JARDELL, STAFF, REPRESENTATIVE GREEN noted that there
is a four part test used by the courts to decide if a party
qualifies qualify as a public interest litigant under rule
82:
1) Is the case designed to effectuate strong public
policies?
2) If the plaintiff succeeds will numerous people
receive benefits from the lawsuit?
3) Can only a private party have been expected to bring
the suit?
4) Would the purported public interest litigant have
sufficient economic incentive to file suit even if the
action involved only narrow issues lacking general
importance?
In response to a question by Co-Chair Therriault, Mr.
Jardell clarified that rule 82 governs the allocation of
attorney fees for the prevailing party. He explained that
the judge makes a determination after a case is settled. The
attorney of the prevailing party then fills a motion to
recover the cost of attorney fees under rule 82. The judge
under general cases would apply rule 82 and apportion a
portion of the attorney fees to the prevailing party. This
is generally around 30 percent of the cost incurred.
Representative J. Davies questioned how statutes regarding
frivolous lawsuits would factor into the process. He
expressed concern that the legislation would take away
lawsuits that would affect public policy and benefit
numerous persons.
Co-Chair Therriault maintained that the current
administrative system is adequate to address Representative
J. Davies' concerns. Representative J. Davies stressed that
there are checks and balances between the three branches. He
emphasized that the Court System allows a final check to
executive and legislative branches. He maintained that
public litigant lawsuits are non-frivolous and have the
ability to affect a large number of citizens.
Mr. Jardell stated that the state of Alaska is the only
state that has a public litigant provision. He noted that
most states have adopted the federal procedure of
identifying specific causes of actions and getting specific
protections for the cause of action. Under this method the
state can control the cause of action that is being
litigated. He asserted that lobbying costs have been
included in attorney fees. He emphasized that rule 82 lists
a number of factors that the court can use to assess
rewards. He maintained that the Court can award full
attorney fees under Rule 82. He added that there is a high
threshold for establishing frivolous lawsuits.
Co-Chair Therriault questioned if the legislation only
affects Rule 82. Mr. Jardell noted that it amends statutory
language that directs the court in setting attorney fees. It
also amends court rules as a preventative measure to prevent
the adoption of a court rule that would supersede a
legislative direction. The legislation reinforces the rule
by amending AS 44,62,300, which deals with actions against
the state and regulations and the process of administrative
appeals.
Co-Chair Therriault asked if public interest litigant status
would remain. Mr. Jardell noted that public interest
litigant status would not be allowed if the party was
litigating an action of the executive branch. It would
remain for actions against municipalities, or the
legislature.
Representative J. Davies questioned why it would not be
granted against a municipality or the legislature. He
observed that the legislature is the policy making body. He
noted that the policy of administrative review has to do
with the inappropriate execution of executive power. It is
the ultimate power the citizens have against an over weaning
government.
Mr. Jardell stated that the reason it has been removed from
the executive branch is because that is where the problem
has occurred.
Representative J. Davies objected to the characterization
that the legislation would remove the "kick me sign".
LAUREE HUGONIN, EXECUTIVE DIRECTOR, ALASKAN NETWORK ON
DOMESTIC VIOLENCE AND SEXUAL ASSAULT testified against the
legislation. She recounted a case that the Network brought
against the Alaska Court System. The Network won the case
and was awarded two-thirds of their attorney fees. She
acknowledged that the legislation would prevent a similar
case. She expressed concern that the legislation would
prevent future cases against the executive branch. She also
expressed concern with the affect of the legislation on SB
123, which amends rule 82. She noted that SB 123 would limit
public interest litigants to 30 percent of their fees on
issues in which they prevailed. She concluded that the
legislation would have adverse affects on smaller public
interest groups. She expressed doubt that groups are making
money on the award of attorney fees.
Co-Chair Therriault questioned how long it took the Council
to decide that their only course of action was through the
court system. Ms. Hugonin replied that it was only a few
months. Co-Chair Therriault questioned if the legislature
had time to consider the actions of the administration and
court system to implement the law that was passed. Ms.
Hugonin noted that the action took placed during the
legislative interim.
PAM LABOLLE, PRESIDENT, ALASKA STATE CHAMBER OF COMMERCE,
JUNEAU testified in support of HB 176. She maintained that
if public interest litigants would pursue frivolous cases if
they do not have anything to lose. She observed that they do
not have to pay the other party's fees. She noted that
businesses that lose must pay the prevailing party's fees.
She referred to a current suit regarding Beluga whales. She
noted that if a public interest litigants win any part of
their suit they are awarded attorney fees.
Representative J. Davies pointed out that the legislation
does not pertain to businesses. He added that attorney fees
are not awarded at 100 percent.
(Tape Change, HFC 99 - 106, Side 2)
Ms. LaBolle reiterated objections to the public interest
litigant status.
Representative J. Davies stated the legislature should look
at if the courts are awarding costs that should not be
awarded, if that is the problem.
In response to a question by Co-Chair Therriault, Mr.
Jardell explained that Alaska is the only state that has fee
shifting. He did not know of any other state that has the
American rule as opposed to the English rule, where parties
bare their own cost except in individual causes of action.
The public interest litigant doctrine is a creation of the
state of Alaska.
Co-Chair Therriault questioned how public interest litigants
bill for attorney fees. Mr. Jardell discussed the Weiss
case. He observed that the public interest litigants were
awarded 100 percent of their attorney fees even though the
court did not grant any of their points. He noted that a
third party won based on challenges on a different argument.
The Supreme Court ruled that the public interest litigants'
goal was achieved through the award of the third party. They
were awarded $454 thousand dollars.
JENNIFER RUDINGER, EXECUTIVE DIRECTOR, ALASKA CIVIL
LIBERTIES UNION (ACLU) testified via teleconference in
opposition to HB 176. She maintained that it would
jeopardize the public's participation in government and
their ability to question government's decisions in court.
She pointed out that current law recognizes that the normal
attorney fee provisions in Alaska would create a significant
impediment to litigation in the public's interest. The court
attempted to remove this impediment as a matter of justice
and fairness. Long standing judicial practice has exempted
litigants acting in the public interest from paying the
prevailing parties cost. She noted that litigants that fit
this category includes individuals, nonprofit groups, Native
tribes, and political organizations. Issues that may result
in a granting of public interest litigant status includes:
civil rights, discrimination, equal protection issues,
tribal rights, political reinforcements, patients rights,
and open government cases where individuals are seeking
access to state government decisions. There have been cases
on fish and game regulations, reapportionment, and anticrime
issues. She maintained that the rhetoric from proponents of
HB 176 seems to be anti-environmental. She pointed out that
HB 176 throws the "baby out with the bath water." She noted
that current law awards public interest litigants, who
prevail, full and reasonable attorney fees. She acknowledged
that public interest litigant that lose do not have to pay
the state's attorney fees, but emphasized that there are
many litigants that would not be able to bring litigation
due to a lack of economic incentive. She maintained that
citizens should be able to challenge governmental decisions
in court. Public interest litigants are only reimbursed if
they prevail. She maintained that the legislation punishes
small public interest litigants. She expressed concern that
the legislation will result in the elimination of public
interest litigation. She stressed that it is in everyone's
interest to encourage challenges in the public interest.
Discussion Vice-Chair Bunde referred to the ACLU's lawsuit
regarding campaign financing. He questioned if it improved
the campaign financing law. Ms Rudinger discussed the
ACLU's case.
TOM LAKOSH, ANCHORAGE testified via teleconference in
opposition to HB 176. He maintained that the legislation
violates five sections of the Alaska Constitution, Article
I, Sections 1, 2, 6 and 7, and Article 8, Section 17. He
stressed that there is an equal protection issue. He
referred to Article I, Section 2. - SOURCE OF GOVERNMENT:
All political power is inherent in the people. All
government originates with the people, is founded upon
their will only, and is instituted solely for the good
of the people as a whole.
Mr. Lakosh asserted that the will of the executive branch is
being placed above the will of the people. He added that the
people's right of petition under Article I, Section 6 would
be abrogated. He reiterated arguments that the legislation
would be unconstitutional.
In response to a question by Representative J. Davies, Mr.
Logan observed that the Department of Law did not testify on
the legislation in Judiciary.
Representative Kohring MOVED to report HB 76 out of
Committee with the accompanying fiscal note.
Representative J. Davies OBJECTED. He argued that the
legislation would take away a status that would advance
cases, that are not frivolous, which could effectuate strong
public policy and benefit numerous people. He asserted that
the legislation is a reaction to a small class of lawsuits.
A roll call vote was taken on the motion.
IN FAVOR: G. Davis, Foster, Grussendorf, Kohring, Williams,
Austerman, Bunde, Mulder, Therriault
OPPOSED: J. Davies
Representative Moses was not present for the vote.
The MOTION PASSED (9-1).
HB 176 was REPORTED out of Committee with "no recommendation
and a zero fiscal note by the House Judiciary Committee,
dated 4/22/99.
ADJOURNMENT
The meeting adjourned at 3:10 P.M.
House Finance Committee 9 4/27/99
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