HB 14-EXEC ETHICS: LEGAL FEES/FAMILY TRAVEL  9:16:10 AM CHAIR LYNN announced that the last order of business was HOUSE BILL NO. 14, "An Act authorizing state agencies to pay private legal fees and costs incurred by persons exonerated of alleged Alaska Executive Branch Ethics Act violations; allowing certain public officers and former public officers to accept state payments to offset private legal fees and costs related to defending against an Alaska Executive Branch Ethics Act complaint; and creating certain exceptions to Alaska Executive Branch Ethics Act limitations on the use of state resources to provide or pay for transportation of spouses and children of the governor and the lieutenant governor." 9:16:26 AM REPRESENTATIVE GRUENBERG, as sponsor, noted that the following was included in the committee packet: a memorandum, dated January 31, 2011, from Dan Wayne of Legislative Legal and Research Services, which discusses the terms "apportionment" and "necessarily incurred"; a technically updated sponsor statement; a sectional analysis; and a memorandum, dated January 25 2011, from Patricia Young of Legislative Legal and Research Services, which is in regard to state payment of legal fees incurred in defense of an ethics complaint against a public official. REPRESENTATIVE GRUENBERG reviewed that HB 14 is similar to House Bill 289 from the Twenty-Sixth Alaska State Legislature. He paraphrased the first two paragraphs of the revised sponsor statement, which read as follows [original punctuation provided]: House Bill 14 sets forth in statute the substance of the Attorney General's recently-enacted regulations establishing standards for (1) reimbursement of legal fees and costs for any executive branch employees accused of ethical violations, and (2) payment of travel expenses for the families of only the governor and lieutenant governor. HB 14 differs from the regulations in two important ways. First, although both the regulations and HB 14 authorize the use of state funds to pay the travel costs of children of the governor and lieutenant governor to certain events, HB 14 would authorize this payment not just for minor children, but also for mentally and physically disabled children who are dependent on the governor or lieutenant governor for care.1 Second, the regulations authorize the state to pay, in advance of exoneration, the ongoing legal fees and costs of an employee accused of an ethics violation. If the employee is not exonerated of the ethics charges, the state must then attempt to recoup the funds it advanced to defend the guilty employee. HB 14, on the other hand, would require that an employee be exonerated before the state could reimburse the employee for his or her fees and costs.2 HB 14 cures both problems. REPRESENTATIVE GRUENBERG noted that the reference to "exonerated" is on page 4, lines 10-11. 9:21:03 AM CHAIR LYNN closed public testimony. 9:21:16 AM REPRESENTATIVE SEATON expressed appreciation for the legal memorandum from Mr. Wayne. 9:21:33 AM REPRESENTATIVE GRUENBERG, in response to Representative P. Wilson, said there is no provision currently in statute or proposed in the bill for recoupment by the state from the person who filed the original complaint [if the complaint was unfounded]. He cited a portion of Ms. Young's memorandum, which read as follows: The Connecticut law further authorizes that if the complainant brought the charge knowing that it was baseless, the public official or state employee will have a cause of action against the complainant for double the amount of damage caused. If the action is successful, the courts may also award the individual the costs and reasonable attorneys' fees for the action. REPRESENTATIVE GRUENBERG said he thinks Alaska's reason for not adopting such a policy is that it could dissuade people with legitimate complaints from coming forward. He said that idea may have merit, but the Department of Law has not suggested that it is needed, and he decided not to bring that issue into the proposed legislation. 9:23:59 AM REPRESENTATIVE P. WILSON expressed her hope that some provision like that would prevent baseless accusations. REPRESENTATIVE GRUENBERG said he thinks the concern is that "the net would cast too broadly." In response to Representative P. Wilson, he offered to contact Ms. Young to obtain the Connecticut law. REPRESENTATIVE P. WILSON said she thinks that would be worth looking into. 9:25:53 AM CHAIR LYNN suggested it would be problematic to distinguish which complaint is and is not frivolous. REPRESENTATIVE P. WILSON said that is why she would like to have the Connecticut law before the committee. 9:26:27 AM REPRESENTATIVE PETERSEN expressed concern that Alaskans would see this as a way to caution against complaining, and he said he does not think that is the right direction to be headed. 9:27:41 AM REPRESENTATIVE GRUENBERG noted that the issue of vexatious litigants has occupied the attention of the court for a small number of litigants who take up an inordinate amount of the court's time. In some cases, the court has required a person who submits complaints repeatedly to first get court approval before his/her complaint is heard. Representative Gruenberg said that is not done "in this area," because the person brings the matter to the attention of the government, and the government decides which cases merit attention. 9:30:07 AM JUDY BOCKMON, Assistant Attorney General/State Ethics Attorney, Opinions, Appeals, & Ethics, Civil Division (Anchorage), Department of Law, stated that she thinks that Representative Gruenberg has "fairly summarized the posture that we're in with ethics complaints." She added that in statute there are two layers of review prior to the probable cause finding: the intake review to see that the complaints meet the requirement of statute and warrant investigation; and the more formal investigation which leads to probable cause and a public accusation and hearing, which rarely happens. REPRESENTATIVE P. WILSON asked Ms. Bockmon what the effect would be if Alaska adopted a law such as Connecticut's. In response to Chair Lynn, she confirmed that she was asking about a possible law that would pertain to the administrative branch of Alaska's government. MS. BOCKMON responded that she is not sure it would change how the state treats a complaint or the levels of review or process of investigation. She echoed the concern expressed by others that such a law may dissuade members of the public from bringing forward complaints. She asked the committee to keep in mind that the complaints that are brought forth are not always of the nature that have been seen in the last couple years; there are complaints that state employees might wish to bring because they see what they believe to be improper action. She indicated that a law, such as the aforementioned Connecticut law could add process, but not necessarily for the Department of Law. She explained that it seems that what is being contemplated is that the subject [of an ethics complaint, who is knowingly wrongly accused,] would later have to take action to recover the fees, and she said she does not know "how that would work." 9:34:23 AM REPRESENTATIVE JOHANSEN concurred with Representative Gruenberg that this is a larger issue, and he suggested that the topic of curtailing frivolous litigation in, for example, the areas of resource extraction and economic development could be taken up another time, while not [dissuading the public regarding the issue of ethics complaints]. 9:35:14 AM REPRESENTATIVE GRUENBERG noted that in the civil litigation, the recovery of costs and fees is under Civil Rules 79 and 82. The general rule is that the prevailing party recovers its costs in full and its fees on a sliding scale. He offered further details. 9:38:13 AM REPRESENTATIVE SEATON expressed concern that [making citizens pay for a complaint that is later found untrue] means that the legislature would be requiring them to know the outcome of the case before they even file a complaint, and that would be "chilling." He said he thinks HB 14 is a good bill. 9:40:28 AM REPRESENTATIVE PETERSEN moved to report HB 14 out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, HB 14 was reported out of the House State Affairs Standing Committee.