HOUSE BILL NO. 106 "An Act allowing appropriations to the civil legal services fund from court filing fees." 1:34:20 PM REPRESENTATIVE ZACH FANSLER, SPONSOR, introduced himself and provided a description of the bill from the sponsor statement (copy on file).: This bill will safeguard Alaskans' access to the civil justice system by creating a stable and sustainable mechanism for funding the Alaska Legal Services Corporation, protecting those who cannot afford to hire an attorney of their own. It allows the Legislature to appropriate up to 25 percent of filing fees paid to the Alaska Court System during the previous fiscal year into the already existing Civil Legal Services Fund. The Alaska Legal Services Corporation-established in 1967-is a nonprofit charitable 501(c)(3), whose funding comes from a variety of state, federal, and private sources. Alaska Legal Services Corporation endeavors to serve a growing number of eligible applicants. Since 1984, the number of Alaskans who qualified for legal services has more than doubled, from 41,000 to over 100,000. Yet currently, the state's contribution to The Alaska Legal Services Corporation is only a fraction of what it was 30 years ago. House Bill 106 aims to stabilize The Alaska Legal Services Corporation funding and help ensure that civil legal aid is available to all Alaskans, not just the few who can afford it. The Need In the past 30 years, the number of Alaskans eligible for legal services-including Alaska Veterans-has more than doubled, from 41,000 to more than 100,000. However, state funding for Legal Services is a small fraction of what it was decades ago. Legal Services does significant work on behalf of Alaska Veterans, protects Alaskans from domestic violence, and also contributes to efforts to lower recidivism rates through helping people bring stability to their lives. Access to civil justice should not be just for people who can afford an attorney. 1:37:11 PM Co-Chair Foster noted that Representative Wilson and Representative Guttenberg had joined the meeting. He listed individuals who were on hand to answer questions. Co-Chair Seaton referred to military members served by the agency. He asked whether the military members had civil attorneys. Representative Fansler could not speak to the legal services provided by the military, but understood that many of the cases handled by civil legal services involved veterans. Co-Chair Seaton requested differentiation between active military and veterans, when discussing the program. 1:39:35 PM NIKOLE NELSON, EXECUTIVE DIRECTOR, ALASKA LEGAL SERVICES, shared that the agency represented veterans, as opposed to active military members. She said that civil legal assistance were provided military families. She expounded that a military family could have a civil legal issue that did not qualify for representation through the military, but that the agency was not duplicating services. Representative Wilson asked for a breakdown of federal and private donations for services in the past year. Representative Fansler deferred the question to the agency. Ms. Nelson relayed that the agency had a wide range of funding sources. She elaborated that the overall budget was approximately $5 million, of which $450,000 was from a state appropriation. She stated that $1.2 million was received from the Federal Legal Services Corporation, and the funding balance after that was received from a variety of sources: private foundation grants, individual donations, and competitive grants and contracts. Representative Wilson asked whether there were legal service benefits available for veterans. Ms. Nelson answered in the affirmative. She furthered that although the VA did provide services, legal representation was not among them. She asserted that if a veteran had been denied benefits, it was helpful to have legal representation. 1:42:27 PM Representative Grenn asked whether current funding levels had resulted in applicants being denied services. Ms. Nelson answered in the affirmative; they had turned away over 850 cases in the past year because the agency did not have the resources to serve them. She elaborated that the cases that were turned away involved victims of domestic violence, and exploited elderly and veterans, and that all the cases were merited. Representative Grenn asked about a normal course of action for an individual who was denied service. Ms. Nelson replied that other services available were referred, but for most people the service was the last resort, and without assistance the client would have to self-represent. Co-Chair Foster noted Representative Pruitt had joined the meeting. 1:44:06 PM Representative Kawasaki asked how the agency prioritized the applicants. Ms. Nelson responded that the cases were prioritized based on the vulnerability of clients, the need (legally), and staff availability. She said that cases were triaged in order for the assessment to be made of the most vulnerable would receive services first. Representative Kawasaki asked what the poverty level was as associated with the term "indigent" as defined in the bill. Ms. Nelson replied that the services were generally limited to those at 125 percent of the federal poverty guidelines, as adjusted for Alaska. She added that there were several specific funding sources that allowed for services for those who did not meet the criteria. 1:45:41 PM Representative Guttenberg assumed that the clientele that the Alaska Legal Services Corporation (ALSC) catered to had a higher percentage of being denied services from private sector and government agencies. Ms. Nelson agreed. She said that the agency had an 86 percent success rate in the cases it took on, and 80 percent of its cases settled out of court. She said that simply letting the other side know that the validity of their legal action was being contested was a huge help to the more vulnerable clientele that had not had successful service elsewhere. Representative Guttenberg asked whether ALSC took a cut from the money awarded to the client by the court. Ms. Nelson clarified the agency did not take cases where there was a large fee award or settlement - those cases would be taken on by a private attorney. 1:48:34 PM Representative Pruitt noted that filing fees went straight to the General Fund. Representative Fansler answered in the affirmative. Representative Pruitt asked whether the court should be decremented the difference if the original appropriation and the $634,000, because they were bringing in fees with the intent of applying them toward the services they provide. MARY SCHLOSSER, STAFF, REPRESENTATIVE ZACH FANSLER, answered that the fund had originally been established in 2007 using fees from punitive damages, which were not as stable as court fees. She detailed the legislation changed it to more stable funding. She added that zero to 25 percent of the court fees could be appropriated to the court, at the legislature's discretion. She said that the bill would offer secondary funding when the financial climate was more stable. Representative Pruitt understood that the punitive damages funds would be replaced by the filing fees, he asked where the punitive damages funds would go. Ms. Schlosser replied that due to the instability of punitive awards in the past ten years, the court fees would be used in addition punitive awards. She detailed that $90,000 had brought forward in the past ten years, $20,000 in the past 4 years. 1:52:25 PM Representative Wilson understood that the $450,000 that was appropriated to the program, had not been based on the punitive awards or court filing fees. She wondered what percentage of the program's funding had to be authorized by the legislature. Representative Fansler replied that punitive damages were currently in place, and the majority of the $450,000 came from a direct legislative appropriation. He clarified that the legislation would provide a mechanism that would allow for a more stable funding source once the state's economy recovered. Representative Wilson assumed if the bill were to pass the court would consider their fees when planning their overall yearly budget. Representative Fansler agreed. He said that it would yearly be up to the legislature to determine what percentage of the fees would be used. He believed that the bill would allow for a multi-faceted approach that gave numerous options for a secure and steady funding stream. 1:55:09 PM Co-Chair Foster OPENED and CLOSED public testimony. He informed committee members that amendments to the bill were due by 5pm on Wednesday, March 8, 2017. Co-Chair Seaton pointed out to the committee that the fees that were collected by ALSC went into the general fund and were subject to appropriation by the legislature. HB 106 was HEARD and HELD in committee for further consideration.