HB 127-OMBUDSMAN  2:31:22 PM CHAIR KELLER announced that the final order of business would be HB 127, "An Act clarifying that the Alaska Bar Association is an agency for purposes of investigations by the ombudsman; relating to compensation of the ombudsman and to employment of staff by the ombudsman under personal service contracts; providing that certain records of communications between the ombudsman and an agency are not public records; relating to disclosure by an agency to the ombudsman of communications subject to attorney- client and attorney work-product privileges; relating to informal and formal reports of opinions and recommendations issued by the ombudsman; relating to the privilege of the ombudsman not to testify and creating a privilege under which the ombudsman is not required to disclose certain documents; relating to procedures for procurement by the ombudsman; relating to the definition of 'agency' for purposes of the Ombudsman Act and providing jurisdiction of the ombudsman over persons providing certain services to the state by contract; and amending Rules 501 and 503, Alaska Rules of Evidence." [Before the committee is CSHB 127(STA).] 2:34:09 PM BETH LEIBOWITZ, Assistant Ombudsman, Office of the Ombudsman, Legislative Agencies and Offices, explained that Section 1 would unfreeze the ombudsman's salary and allow step increases as the position is a high level salary that is not set like a commissioner or director; rather it is currently frozen at Range 26, Step A. Therefore, the ombudsman, unlike her staff, currently never receives a pay increase. 2:35:05 PM REPRESENTATIVE GRUENBERG related his understanding that the ombudsmen is not under the jurisdiction of the State Officers Compensation Commission. 2:35:33 PM MS. LEIBOWITZ replied yes, explaining that since the ombudsman is in the legislative branch, the executive salary setting has nothing to do with the ombudsman's office. 2:35:44 PM REPRESENTATIVE GRUENBERG inquired as to whether the ombudsman would prefer to be under the State Officers Compensation Commission. MS. LEIBOWITZ responded "No," specifying that the ombudsman would simply like the salary provision to remain similar to what it is now, but allow step increases. In further response to Representative Gruenberg, Ms. Leibowitz confirmed the language of HB 127 is sufficient to allow the step increases. 2:36:14 PM MS. LEIBOWITZ, returning to her review of HB 127, explained that Section 2 clarifies an ambiguous issue regarding the ombudsman's office ability to use the personal services contract provision that is provided for other legislative agencies under AS 24.10.060(f). She opined that Legislative Affairs Agency personnel believe the ombudsman's office can [use the personal services contract]. However, the ombudsman's office would like this [confirmed] so it is not required to go through the legislative history of several different versions of Title 24. 2:37:01 PM REPRESENTATIVE GRUENBERG questioned whether any legislative contracts have to go through the State Procurement Code or solely through Legislative Council. In the event HB 127 passes, what provision would apply: the State Procurement Code, Legislative Council, or both. MS. LEIBOWWITZ answered that neither is the case as personal services contracts basically allow temporary staff on board. Since it is not a procurement matter, it does not require Legislative Council. As the ombudsman's office has to budget, she related her understanding is that the ombudsman can make this determination, she opined. 2:37:52 PM MS. LEIBOWITZ deferred to Chair Wes Keller regarding Sections 3- 5 as the ombudsman's office does not support those sections. 2:38:12 PM CHAIR KELLER stated he was the sponsor of [the amendments] to those sections in the House State Affairs Standing Committee. He then noted there is an amendment pending in the House Judiciary Standing Committee which would increase reporting and formalize the interaction process between the ombudsman's office and the legislature. The ombudsman's office is complaint driven and these sections request information on the complaints the ombudsman decides not to investigate, he explained. 2:39:01 PM MS. LIEBOWITZ, returning to her presentation, explained that Section 6 deals with the ombudsman's powers during an investigation. Currently, AS 24.55.160(a)(4) provides that "notwithstanding other provisions of law, have access at all times to records of every state agency, including confidential records, except sealed court records, production of which may only be compelled by subpoena, and except for records of active criminal investigations and records that could lead to the identity of confidential police informants." She highlighted that this is the one reference as to "state agency" in the Ombudsman Act rather than "agency." Since the ombudsman has jurisdiction over municipalities and school districts that opt in, and within the criminal division section over some private contractors within HB 127 the intention of HB 127 is to delete "state" so the legislation simply refers to an agency, she explained. 2:40:30 PM REPRESENTATIVE GRUENBERG questioned if "state agency" or "agency" is defined. MS. LIEBOWITZ specified that "agency" is defined in AS 24.55.330. REPRESENTATIVE GRUENBERG asked if "state agency" is defined. MS. LIEBOWITZ responded "No," and explained that the ombudsman statute references "agency" and that is included in the definition "state departments" and goes through a long list of state and municipal entities that can be included. 2:41:21 PM MS. LEIBOWITZ, continuing her presentation, stated that Section 7 adds an anti-waiver provision specifically targeted to allow state agencies or other entities to share advice it has received from the Department of Law should the agency so choose, as the ombudsman's office does not have mandatory access. In the past, state agencies have provided communications with the Department of Law and on occasion it has happened by accident and sometimes deliberately in order to explain what appeared to be an otherwise unexplainable action on the agency's part. She related the ombudsman's understanding that agencies sharing communications from the Department of Law with the ombudsman's office places the agency in danger of completely waiving its attorney-client privilege in a manner that could harm it in litigation with a private litigant. Therefore, the ombudsman's office requests that the state agencies be allowed to be candid without causing them additional damage. REPRESENTATIVE GRUENBERG pointed out that AS 25.55.330(2) is a lengthy definition of agency. 2:43:08 PM MS. LEIBOWITZ remarked that within Section 8, the ombudsman currently has the privilege not to testify in a judicial proceeding, which is typical of ombudsman acts created by state governments. She explained that the ombudsman's privilege is not express regarding its files and documents acquired [during an investigation]. Although the aforementioned has not been an active problem, she related that the ombudsman would like the privilege made very clear that it does not testify or produce documents from its office. REPRESENTATIVE GRUENBERG asked if this applies only to judicial or administrative proceedings, but not to legislative hearings. He posed a scenario wherein the ombudsman prepared a report leading to a legislative hearing under oath with subpoena powers, and the ombudsman's office could be compelled to testify as it is a branch of the legislature. 2:44:34 PM MS. LEIBOWITZ confirmed that the ombudsman has not attempted to remove itself from legislative subpoena power. Returning to her presentation, she referred to Section 9, which would allow the ombudsman to adopt procurement regulations similar to those used by the remainder of the legislative branch. The language in Section 9 also makes it clear that when the ombudsman uses her/his discretion to hire an investigator it does not require a procurement request for proposals or competitive bids, she opined. CHAIR KELLER requested Ms. Leibowitz skip Sections 10-11 as they are proposed to be deleted. 2:45:45 PM REPRESENTATIVE GRUENBERG, speaking as a member of the Legislative Council, asked whether the intention is to prepare regulations that solely apply to the ombudsman's office. He opined that Legislative Council would likely benefit from knowing the thinking of the ombudsman's office regarding whether regulations should be adopted for other aspects of legislative procurement. MS. LEIBOWITZ agreed to share the ombudsman's office regulations with Legislative Council as it is the only legislative branch entity that actually does any form of procurement regulations. Since the ombudsman's office has been given this particular status, it wants it to work as well as possible, she opined. 2:46:34 PM MS. LEIBOWITZ moved on to Section 12, which would require a two- thirds majority to ratify a statute change that would affect Rules of Evidence 503 regarding attorney-client privilege and a change to the existing statutory privilege against testifying. REPRESENTATIVE GRUENBERG commented that this is the constitutional way to do an indirect court rule amendment. 2:47:43 PM MS. LEIBOWITZ, continuing her presentation, advised that since Section 13 deals with the effective date for Sections 10-11 and there are amendments to delete Sections 10-11, she would not comment further. Section 14 is similar to Section 12 in that it deals with indirect court rule amendments and basically provides that Sections 7-8 will only take effect if it a two-thirds majority vote is received. 2:48:35 PM CHAIR KELLER reiterated that the ombudsman's office is part of the legislature and the legislature not only chooses the ombudsman but sets the salary, can fire the ombudsman, and sets the rules. The ombudsman's office has investigative powers and is complaint driven. Therefore, a citizen of Alaska who feels he/she has received a raw deal by the administration can lodge a complaint with the ombudsman's office which has a process with which to respond, investigate, and determine if the complaint has merit. He remarked there are important "clean up" provisions in HB 127. 2:50:08 PM MS. LEIBOWITZ characterized Chair Keller's summary as reasonable, although she pointed out that the legislature originally and deliberately created the ombudsman, established the salary in statute, and established the procedures of the office that would be set by the ombudsman. The legislature appoints the ombudsman and can fire the ombudsman, but very deliberately made the decision that this entity that responds directly to citizens would function independently to a large extent, she opined. 2:50:43 PM CHAIR KELLER agreed, announced public testimony was closed, and stated HB 127 is before the committee for amendments and debate. 2:51:08 PM CHAIR KELLER moved to adopt Amendment 1, labeled 28-LS0088\E.1, Gardner, 3/11/14. Page 2, line 11, following "if": Delete "the chair of" Page 2, line 12, following "requests an": Insert "ombudsman" Page 2, line 18, following "complainant": Delete "consents to disclosure" Insert "requests" REPRESENTATIVE PRUITT objected for purposes of discussion. 2:51:34 PM JIM POUND, Staff, Representative Wes Keller, Alaska State Legislature, advised that Sections 3-5 of this legislation are based upon communications directly between the ombudsman's office and the legislature via the Administration Regulation Review Committee, which has the authority to operate and meet year round and represents both houses of the legislature. Amendment 1 proposes on page 2, line 11, deleting of the language, "the chair of" which would then read "if the  Administrative Regulation Review Committee requests an  investigation on behalf of the legislature or". He explained that the full committee votes and if the committee decides to investigate it will submit an investigation request. Also, the ombudsman does have the right to say "no," as it is a "may" investigate scenario, he opined. In response to a committee member's concern that the language in HB 127 authorizes the Administrative Regulation Review Committee the power to investigate, following the language "requests" the language "ombudsman" was inserted specifically to state the Administrative Regulation Review Committee has the authority to "request" the ombudsman to investigate. With regard to the concern by the ombudsman's office as to how an individual files a complaint and whether or not they intend for their name to be attached to the [complaint], the language "consent to disclose" on page 2, line 18, was changed to "requests", which requires the actual complainant to request their name be included if they so choose. 2:54:29 PM CHAIR KELLER, reminding the committee that the ombudsman does not support the inclusion of Sections 3-5, explained that he proposed Amendment 1 because he determined that the legislature has an interest in reviewing what the ombudsman's does and the degree of independence the office holds from the legislature, so that the legislature can evaluate whether or not the complaints are valid. He opined it is completely appropriate for the committee to consider these amendments, and added that future amendments can be brought forth that will further refine or remove Sections 3-5, at the discretion of the House Judiciary Standing Committee. 2:55:38 PM REPRESENTATIVE GRUENBERG moved that Amendment 1 be broken into three parts, with one for each section involved in HB 127. 2:56:27 PM CHAIR KELLER announced that he would withdraw Amendment 1 until the next meeting and put the changes in and work from a [committee substitute], although he stated he would rather the amendment not be split due to time restrictions. 2:56:45 PM REPRESENTATIVE GRUENBERG withdrew his [motion]. 2:57:42 PM REPRESENTATIVE PRUITT related his understanding that Amendment 1 allows the Administrative Regulation Review Committee authority to request an investigation, while requests to include the name of the complainant on the complaint and the reason the ombudsman does not investigate complaints will only go to the chair of the Administrative Regulation Review Committee. Therefore, the initial investigation [request] comes from the whole committee, while the communications back is only required to go to the chair. MR. POUND responded "That is correct." 2:58:58 PM REPRESENTATIVE PRUITT removed his objection. There being no further objection, Amendment 1 was adopted. 2:59:18 PM REPRESENTATIVE PRUITT moved to adopt Amendment 2, labeled 28- LS0088\E.3, Gardener, 3/12/14. Page 1, lines 8 - 11: Delete "relating to the definition of 'agency'  for purposes of the Ombudsman Act and providing  jurisdiction of the ombudsman over persons providing  certain services to the state by contract or grant and  over instrumentalities of the state;" Page 4, lines 7 - 30: Delete all material. Renumber the following bill sections accordingly. Page 5, lines 15 - 18: Delete all material. Renumber the following bill section accordingly. Page 5, line 22: Delete "sec. 12(a)" Insert "sec. 10(a)" Page 5, line 24: Delete "sec. 12(b)" Insert "sec. 10(b)" CHAIR KELLER objected. 2:59:38 PM REPRESENTATIVE PRUITT explained stated that Amendment 2 deletes Sections 10, 11, and 13, with Sections 10-11 being the key pieces. The ombudsman's office requested in Section 10 that the legislature clarify whether or not the ombudsman has jurisdiction over the Alaska Bar Association, which is essentially "instrumentality," and adds to its current jurisdiction contracts awarded by state agencies that provide prison, or halfway house, or similar residential services. He specified that Amendment 2 deletes those provisions. REPRESENTATIVE LEDOUX surmised then that under Amendment 2 the legislature is not only taking out the prison, halfway house, [or similar residential services on behalf of the Department of Corrections], HB 127 is also taking out "instrumentality." She asked if the Alaska Bar Association will clearly not be subject to the jurisdiction of the ombudsman if Amendment 2 passes 3:01:52 PM CHAIR KELLER responded "Definitely not," as under AS 08.08.010 the Alaska Bar Association was created by the Alaska State Legislature and the ombudsman is an investigative arm of the legislature, and therefore has the authority to investigate the Alaska Bar Association. However, he added that this is a provision has a history of contention as essentially the ombudsman is requesting clarification on whether or not the Alaska Bar Association is under the investigative jurisdiction of the ombudsman's office. By passing Amendment 2, the legislature does not clarify that, and avoids the question for now. 3:03:03 PM REPRESENTATIVE LEDOUX questioned as to why the legislature would not want to clarify [whether or not the Alaska Bar Association is under the investigative jurisdiction of the ombudsman's office]. What is the down side of determining whether it is under the jurisdiction or not, she asked. REPRESENTATIVE PRUITT explained that he does not want HB 127 to not pass because of the controversy and potential jurisdiction issues surrounding this particular piece of it. Therefore, he proposed Amendment 2. REPRESENTATIVE LEDOUX surmised then that if the ombudsman requests clarification, it would be best to place the clarifying language in an entirely separate bill so HB 127 can make its way through the legislature. CHAIR KELLER suggested that is a good question to ask the ombudsman as this is the ombudsman's housekeeping legislation. 3:06:12 PM REPRESENTATIVE GRUENBERG stated he previously made a mistake in that he would prefer not to include Amendment [1] in the [committee substitute] but rather to divide the [pieces] of Amendment 1 as he prefers to debate each separate piece. He said the ombudsman should have jurisdiction to investigate regarding the Alaska Bar Association. He then requested the committee not incorporate [Amendment 2] into a committee substitute, and also revisit Amendment 1 and debate each separate piece. 3:07:23 PM CHAIR KELLER offered that Representative Pruitt could withdraw his motion [to adopt Amendment 2] and noted there was extensive testimony in the House State Affairs Standing Committee regarding concerns contractors have had. 3:08:06 PM CHAIR KELLER withdrew his objection to Amendment 2. REPRESENTATIVE PRUITT withdrew proposed Amendment 2. [HB 127 was held over.]