HOUSE BILL NO. 48 "An Act relating to appropriations to the civil legal services fund." 1:39:55 PM Representative Hannan introduced the bill. The bill would amend an existing statute and change the percentage of court filing fees that could be appropriated to the Civil Legal Services Fund (CLSF). She stressed that the Alaska Legal Services corporation (ALSC) and access to civil legal services was created to help safeguard low-income Alaskans' access to civil actions and civil legal representation. The bill would help create a more stable mechanism for state funding for ALS. The bill would amend the statute creating CLSF (AS 37.05.590) so up to 25 percent of court filing fees could be appropriated by the legislature to CLSF to provide civil legal aid to low-income Alaskans. Representative Hannan continued that at current funding levels, ALSC turned away hundreds of families seeking assistance each year due to funding limitations. She shared that ALSC was the most referred to legal provider in the state, and she thought many members had referred constituents there. She asserted that ALSC's work helped reduce unnecessary lawsuits and reduced court costs. She thought the self-help resources ALSC developed and maintained helped people to navigate the system more effectively and efficiently. 1:41:46 PM HUNTER MEACHUM, STAFF, REPRESENTATIVE SARA HANNAN, reviewed the sectional analysis (copy on file): Section 1 amends AS 37.05.590. to allow for up to 25 percent of court system filing fees to be appropriated by the Legislature to the existing Alaska Civil Legal Services Fund each year to provide access to civil legal aid for low-income Alaskans. Representative Galvin asked if there were funds that were not spent in one year, if the funds would be returned to another fund. She asked if the funds would be tracked year by year. Representative Hannan responded that CLSF was a fund where court filing fees were placed. The bill change would allow the legislature to appropriate up to 25 percent of the filing fees to ALSC, whose operational costs far exceeded the state contribution. Co-Chair Foster relayed that the general counsel for the Alaska Court System was present. 1:43:45 PM NANCY MEADE, GENERAL COUNSEL, ALASKA COURT SYSTEM, relayed that she was mostly present to answer questions. She detailed that all of the court's filing fees currently went directly to the General Fund (GF), as did other funds collected such as bail, fines, or other items. The GF was subdivided into certain funds and some amount was put into the CLSF. Currently 10 percent of the filing fees went into CLSF, as opposed to the 25 percent proposed in the bill. The funds were forwarded to ALSC by the Department of Commerce, Community and Economic Development (CED). Representative Stapp asked how ALSC was funded prior to the 10 percent. Ms. Meachum responded that prior to 2018, the fund was made up of punitive damages awarded in civil matters. Representative Stapp asked if the current 10 percent of court filing fees was an adequate sum for a period of time before inflationary pressure changed matters, or if the amount was a lifeline. Representative Hannan replied that it was a lifeline. She noted that the ALSC executive director was available to answer questions. She recalled that at one time there were substantial direct appropriations of Unrestricted General Funds (UGF), and the court fees were not part of the calculation. She pondered that civil cases did not typically have punitive damages. She recounted that in 2018, the original bill to create the fund was for 25 percent, and there had been a political compromise to reduce the amount to 10 percent. She felt it had never been adequate to meet the needs. She thought the director would discuss the number of requests and number of people turned away because of a lack of resources. She thought ALSC had to prioritize life/safety issues. Representative Stapp asked when the last time was that the filing fees were increased. Ms. Meade responded that the filing fees were set by the Alaska Supreme Court through administrative rule and were last amended (increased) in 2019. 1:47:40 PM Representative Stapp asked if the court system had interest in raising the fee structure in the near future. Ms. Meade responded that the supreme court was probably unaware of the bill or system. One the court deposited its fees it did not track where the legislature chose to appropriate. The court was not currently considering raising its filing fees. The fees were always set with an eye towards a blance of allowing people to access the courts and an appropriate amount to charge for the service. Representative Bynum observed that there was a fiscal note for $468,000, coming out of the GF to go to ALSC. He asked if there was anything currently prohibiting the legislature from adding more UGF for the purpose. Ms. Meade responded "no." Representative Bynum understood that the 10 percent that was going to CLSF fees were from all filing fees in the court system, or if it was specifically for filing fees for civil cases. Ms. Meade responded that the court system did not charge filing fees for criminal cases. She continued that the court charged fees for civil cases ranging from divorce, appeals, and small claims in different amounts. The amount was generally $250. Co-Chair Josephson asked about punitive damages. Representative Hannan responded that from 2007 to 2018, 50 percent of punitive damage fees had been awarded. It was very rare for punitive damages to be awarded. Co-Chair Josephson noted that when he thought of punitive damages, he thought of a civil lawsuit or personal injury action in which damages went to a prevailing party because of the egregious nature of the harm or misconduct of the other party. He thought punitive damages went to human beings and not the court system. Representative Hannan responded that it was her understanding. She would prefer to have an attorney answer the nuances regarding why punitive damages did not work as a funding mechanism. 1:51:56 PM Ms. Meade added that the current language of the statute starting shown in the bill on line 6, "the legislature can appropriate to the fund from amounts deposited into the GF of the state under AS.09.17.020(j)." There were two funding sources under the bill. There was also discussion of filing fees. She relayed that there was a change made to statute in the late 1990s in conjunction with tort reform. Subsection (j) of the statute referenced that if a person received an award of punitive damages the court shall require 50 percent of that amount be deposited into the GF of the state. She thought the provision was odd and probably did not work as intended as there was no enforcement mechanism. The court put on an order when there was a punitive damages award (which was vanishingly rare) that the person needed to put 50 percent of the amount collected into the GF. To her knowledge there had been zero dollars collected into the GF under the provision and thereafter into the CLSF under the provision of law. Co-Chair Josephson pointed out that although the punitive damages awards were vanishingly rare, the law that funds that entered the GF get distributed to ALSC. Ms. Meade responded yes if the funds entered the GF. She pointed out that almost all cases were settled, and even any award of punitive damages was very rare. If there was a case where a jury awarded punitive damages (which was rare to non-existent) the award would say that the person must send 50 percent to the GF. The attorney general was notified of the judgements but to her knowledge, she did not know if any money had ever been deposited to the GF under the provision during her tenure. Co-Chair Josephson relayed that he would vote for the bill, but he was engaging in academic discussion. Representative Tomaszewski asked about the governor's budget request of ten percent, which was about $312,000; and the bill would raise it to 25 percent, which was an additional $468,000 for a total of $781,000. He asked who ALSC was and how it was organized. Representative Hannan replied that she thought executive director would come forward and speak to Representative Tomaszewski's question. 1:55:59 PM MAGGIE HUMM, EXECUTIVE DIRECTOR, ALASKA LEGAL SERVICES CORPORATION, thanked the sponsor of the bill. She read from prepared remarks: ALSC is a non-profit law firm that has provided free, critical, civil legal aid to low-income Alaskans in all corners of this state since we opened our doors almost 60 years ago. The services we provide help protect Alaskans from domestic violence and other abuse, protect Alaskan's livelihoods and benefits to which they are legally entitled, and help Alaskans gain access to healthcare and maintain safe housing. The very best way to demonstrate the work that we do is by sharing client impact stories and I'd like to both open and close with an anecdote: Becky and her husband are seniors who came to ALSC for help removing unsafe family members that were living on their land. As you know, this is not an uncommon scenario in Alaska. Becky and her husband tried to resolve his problem by themselves, but the family members refused to leave, even when given the proper notice to vacate the property. Things unfortunately turned violent. An ALSC attorney helped Becky and her husband file an eviction case where they were successful in removing the family members from their property. Becky and her husband are now able to live on their land in peace. In SFY24, through our 14 locations throughout the state, we provided legal assistance in over 6,200 cases impacting over 17,000 Alaskans in 204 communities. The communities you will find us in include: Anchorage, Bethel, Dillingham, Fairbanks, Kenai, Kodiak, Ketchikan, Kotzebue, Palmer, Nome, Utqiagvik, and Wasilla. We are also located inside the Alaska Native Medical Center and Providence Hospital in Anchorage. Last SFY: ? Nearly ? of our clients were seniors ? Over 1/3 were live with one more disabilities ? Hundreds - at least 17% - of our clients identify as victims of domestic violence ? At least 7% identified as veterans While there are a number of critical legal services we can provide and populations we can serve, I also want to mention that there are a number of types of cases that we do not do and are prohibited from doing by federal law. These include but not limited to: criminal matters, representation of prisoners in litigation, class actions, cases on welfare reform, cases about abortion or assisted suicide, cases about redistricting, representation of undocumented immigrants except were DV or human trafficking is involved; evictions from Public Housing Involving Illegal Drugs, and fee generating cases that private lawyers will take on contigency. The critical legal services that we do provide stabilize households that are in crisis and help to prevent problems upstream. In doing this, we save the state and our local communities money. A 2012 study commissioned by the AMTHA found that ALSC has a 5:1 ROI on investment. Annually we bring $17.8 million dollars Economic Benefits to communities across Alaska. These returns come in a variety of ways, for example: ? $600,000K in Shelter costs avoided when we prevent a family from becoming homeless ? $2.6 Million in Avoided medical and counseling costs for survivors of dv and their children 2:00:00 PM Ms. Humm continued to address her prepared remarks: A comprehensive study on Alaska's justice ecosystem showed that ALSC is the most referred to entity in the State for households facing legal problems. ? By providing clients with advice, referring them to resources, helping them fill out forms, or representing them in court, we reduce the burden on the court system and other state systems ? We also partner closely with the state court system, state and local agencies, and other legal service providers to increase efficiencies in court cases and referrals. These partnerships also bring additional efficiencies and reduce costs. Despite this hard work by ALSC and other justice partners, Alaska continues to face a crisis when it comes to Alaskans being able to identify and get help for their civil legal problems: ? Last year, ALSC had to turn away hundreds of families who sought assistance w/ compelling needs. On average, we turn away roughly 1 family for each one that we serve. Not because there weren't laws to protect them but because we lacked the resources to help. ? A recent national study found that low-income Americans do not get enough legal help for almost all - 92% - of their civil legal problems. When we turn people away, they often have nowhere else to go. When these problems are not addressed, they result in a cascade of legal, social, and economic consequences. Many of which are dire, like losing a home or being subjected to continued violence. ? Individuals are not entitled to attorneys in civil matters as they are in criminal matters. Further, there are remedies that crime victims cannot obtain in criminal matters and must turn to the civil legal system for. For example, a domestic violence protective order is a civil proceeding. ? Equal access to justice is a cornerstone of our democracy. Our state and federal constitutions guarantee due process and equal protection under the law, but when it comes to the civil legal justice system, we are facing an enormous justice crisis because there is a significant gap between those who can actually identify, address, and get help for their civil legal needs and those who can't. The fact is our target population continues to grow each year and funding is not keeping pace. Our funding through the state is about half of what it was 40 years ago but the poverty population has more than doubled. HB 48 relates to one of our critical funding sources - the Civil Legal Services Fund. ? The fund operates as follows - At legislature's discretion, it is funded by a 50% of the State's share of civil punitive damage awards and up to 10% of court system filing fees collected in the most recent Fiscal Year. ? The statute was last amended (2018) with nearly unanimous support after widespread bi-partisan acknowledgement that ALSC was severely underfunded. ? Because the availability of funds is dependent on court system filings and punitive damages awards to the state, the amount available from the fund can vary greatly. Since established over 15 years ago, funds have fluctuated greatly from $0 to $360K. ? In FY24 $296,400 is being appropriated ? HB 48 would increase that 10% of court system filing fees to 25%/ For every extra 100K we receive, we estimate that we can help another 182 Alaskans. We are doing as much as we can with our current resources - every dollar is extremely important to us. We stretch and leverage our funding and we are incredibly efficient: ? We are leveraging resources wtih donated office space and support from all local communities where we have offices ? Attorneys are paid far less than the private bar or attorneys that work for the state. Attorney in Anchorage starts at $66K compared to a state attorney that starts at $96K. This was after making significant improvement to our salary scales two years ago. ? Our volunteer program leveraged nearly 2,000 volunteer hours last year. This was the work of community justice workers, pro bono lawyers, law clerks and other volunteers in hundreds of cases. ? And, to move the needle on addressing the justice crisis that I just described, we are innovating. ALSC has set up the first of its kind in the nation training and resource center to train and credential community members who are not lawyers to provide targeted civil legal assistance. This approach to closing the justice gap - the development of a network of Community Justice Workers across our state - is being watched across the nation with multiple states, including TX and AZ, either actively in the process of replicating it or looking at it as a solution to their own justice gap. I'd like to close with another client impact story: ? Ronald came to ALSC for help because his adult son was refusing to leave his home, stealing from him, and creating an unsafe situation for Ronald. Ronald had acute health problems that made him very vulnerable. An ALSC attorney helped Ronald secure a temporary and long-term financial abuse protective order. As a result, his son was removed from the home and Ronald is now safe. With the protective order in place, If his son returns, Ronald is able to call law enforcement for help. 2:06:33 PM Ms. Humm continued her remarks: Civil legal aid is critical to help those who need it - often a lifeline - but the cost of providing these services is increasing along with the demand for these services. If our funding does not keep pace, we will be forced to turn away hundreds of people like Ronald and Becky who I mentioned in my opening. This is not acceptable. Passing HB48 is critical to adequately fund civil legal services and addressing the justice crisis in Alaska. Thank you so much for your time and consideration. Representative Tomaszewski about ALSC's budget and its other funding sources. Ms. Humm responded that ALSC's overall budget was just over $10 million. She noted that ALSC got funding from a variety of sources including federal funds, state funds, local grants, private donations, and tribal contracts. Co-Chair Foster noted that Ms. Humm had mentioned that for every one client ALSC took on, it had to turn away another. He asked how many more people the corporation could help with the additional funding proposed in the bill. Ms. Humm responded that ALSC's best estimate was that for each additional $100,000 it could help 182 people, and with an additional $400,000 it could help roughly 750 to 800 additional people. 2:09:04 PM Representative Bynum asked if criminal fines and fees were applied in criminal cases when people were found guilty. He asked about the original intent for the fees and what they would be used for. Ms. Meade responded that the court had charged a filing fee for civil cases for decades and had always deposited the funds into the GF. She was not sure of the precise nature of Representative Bynum's question. Representative Bynum pondered that the fees were put in place for a reason, and although the funds might not be designated as such, he assumed the purpose was to support the functions of the court system. He asked why the fees would not be increased to support the endeavor. He was trying to understand what would not be funded when the funds were moved to ALSC. Ms. Meade clarified that the court was neutral on the bill. She continued that the assumption the court charged filing fees and put them into the GF to support the court system was not the case. She explained that every court system in the country had some filing fees. She thought the fees were partially to ensure that a person who filed a court case had a stake in the matter, and though the fees could potentially cut down on frivolous lawsuits. The dollars currently went into the GF that could be appropriated by the legislature as it wished. The fees were fungible, GF funds that had nothing to do with the court system's operating budget request or anything that it did. She could not answer the question of what would been funded if the funds did not go to ALSC. Representative Bynum appreciated that the organization looked for other funding. He mentioned being on the Ketchikan Borough Assembly and noted that the borough provided $25,000 per year for the services through the Community Grant Program. 2:13:43 PM Representative Hannan added that nearly every state supported civil legal aid with its court fees and fines and with direct appropriation. She cited that Alabama, Oregon, and Idaho were the only states that did not receive state funding into legal services. She noted that many times grant funds on who the grants could serve. 2:14:51 PM Co-Chair Foster OPENED public testimony. 2:15:14 PM LAUREE MORTON, DEPUTY DIRECTOR, ALASKA NETWORK ON DOMESTIC VIOLENCE AND SEXUAL ASSAULT, testified in support of the bill. She relayed that the Alaska Network on Domestic Violence and Sexual Assault (NDVSA) was the state coalition of 24 community-based domestic violence and sexual assault response service providers. She contended that ALSC was one non-profit legal corporation that that assisted victims of domestic violence and sexual assault. The Alaska Native Justice Center, the Alaska Institute for Justice, and the network worked with ALSC to ensure that as many victim survivors as possible were served when they sought assistance to navigate the civil justice system. She stressed that the state needed a strong, well-funded ALSC. Ms. Morton cited that survivors rated the filing of protective orders as one of the two most effective tools in stopping domestic violence, second only to leaving. She cited statistics that indicated an 80 percent reduction in police report reductions and reports of physical violence in the following 12 months. She noted that protective orders could be the difference between life and death, and survivors turned to the courts for protective orders, child custody, and divorce when seeking to escape violence. Having an attorney in their corner made it more likely a victim would receive a favorable outcome, and research showed legal assistance of any kind had been demonstrated to improve outcomes. The tangible benefits were increased physical and economic security. Many studies showed a larger societal benefit. She cited a reduction in the need for other services such as foster care and police services. Ms. Morton discussed cost-benefit analyses that indicated civil legal assistance almost always provided economic return for society. She emphasized that the expansion of civil legal assistance for victims must be contemplated if the state was serious about preventing domestic violence. 2:19:15 PM JAMIE KOKOSZKA, PROGRAM COORDINATOR 2, THE GOVERNOR'S COUNCIL ON DISABILITIES AND SPECIAL EDUCATION, WASILLA (via teleconference), testified in support of the bill. She thanked the sponsor and co-sponsors. She discussed the activities of the Governor's Council on Disabilities and Special Education and how ALSC helped by providing assistance to low-income Alaskans with disabilities in legal matters. She read a list of examples of people seeking help for civil legal matters. She reminded that half of people were turned away due to lack of resources. She noted that people with disabilities were more likely to be victims of financial fraud. She emphasized that the council supported the bill. 2:22:16 PM LAVADA SIMEONOFF, SELF, ANCHORAGE (via teleconference), testified in support of the bill. She provided testimony on behalf of Mark Webber to accommodate his disability, which affected his ability to communicate. She described Mark's story and experience seeking legal services. He sought assistance from at least 11 law firms before getting assistance from ALSC. She described how ALSC took action in helping Mark seek justice. Mark was guided through the legal process with clarity and professionalism. She could not overstate the significance of ALSC's involvement. She stressed that ALSC made sure they had a voice in the matter. She expressed gratitude for ALSC and its assistance after it had made an immeasurable difference in Mark's life. 2:26:47 PM BRITNI HENRY, SELF, WASILLA (via teleconference), testified in support of the bill. She had reached out to ALSC on several occasions. She had left a long-term marriage and had been in a vulnerable position. She recounted reaching out for assistance and not receiving it because ALSC did not have the capacity. She had received help the previous year and described it as making a remarkable difference in her life. She described the help from ALSC as making a significant impact. She wished that ALSC could help more people. She wished more women could get the same support from ALSC. 2:29:57 PM Co-Chair Foster CLOSED public testimony. 2:30:41 PM SANDRA MOLLER, DIRECTOR, DIVISION OF COMMUNITY AND REGIONAL AFFAIRS, DEPARTMENT OF COMMERCE COMMUNITY AND ECONOMIC DEVELOPMENT, ANCHORAGE (via teleconference), reviewed the fiscal note with control code tRzkm and OMB component 2879. There was $468.9 thousand in the governor's budget for the fund, and with a change to 25 percent it would add an additional $312.6 thousand. In following years there would be $781.5 thousand if the entire 25 percent were allocated. 2:31:38 PM Ms. Meade reviewed the zero fiscal note for the Alaska Court System, OMB component 768 and control code EyJrz. The court system deposited any funds it collected (fees, fines, or bail) on to the GF for distribution by the legislature. None of the funds went to the court system or its operations, and it was inconsequential to the court system how much the legislature decided to put into the sub-fund of the GF. Co-Chair Foster asked for the publish date of the fiscal note Ms. Meade was referencing. He clarified the control code. Ms. Meade clarified that her fiscal note did not have a public date. She noted that regardless of the publish date, her testimony would remain the same. Representative Bynum asked if the change was possible without a bill. He asked if, since 2018, there had been any funds appropriated outside the 10 percent of the sub-fund. Ms. Meade responded that the previous year there had been an additional appropriation. She deferred to Ms. Humm as to the exact amount. Ms. Humm affirmed that ALSC had a $400,000 appropriation the previous year, and the same amount was also in the budget for the current year. The funds were separate than the CLSF. Representative Bynum asked if the intention was to utilize the additional funds proposed in the bill as well as the appropriation. Ms. Humm replied that ALSC was falling behind in funding since the poverty population had grown. The organization would not be using the additional CLSF funds as a substitute for the appropriation because it would not gain any ground if the amount of funding remained the same. Representative Bynum understood that when someone was in need, civil cases were non-monetary in nature. He asked if there were cases where there was significant monetary gain, and if ALSC charged for services in such cases. Ms. Humm responded that ALSC was prohibited from charging for their services. On occasion, ALSC would receive an award for attorney fees if it prevailed in a case and it was appropriate under Alaska law. The funds would come to ALSC like it would to a law firm, but the funds had spending restrictions. 2:37:39 PM Representative Stapp did not like the messiness of the funding situation and would like to clean it up. He asked if ALSC would be open to having 50 percent of the court filing fees go to ALSC and then getting rid of the GF appropriation in the budget. Ms. Humm thought the situation would be possible, but only if the amount were increased to accommodate for the loss of the GF. Co-Chair Foster set an amendment deadline for March 27 at 5pm. HB 48 was HEARD and HELD in committee for further consideration. 2:39:11 PM