Legislature(2015 - 2016)HOUSE FINANCE 519
04/13/2015 01:30 PM FINANCE
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HOUSE BILL NO. 154 "An Act allowing appropriations to the civil legal services fund from court filing fees." 2:29:38 PM REPRESENTATIVE BRYCE EDGMON, SPONSOR, explained that the bill created a stable funding mechanism for the Alaska Legal Services Corporation (ALSC). He stated that the bill allowed up to 25 percent of the filing fees paid to the Alaska Court System from the previous fiscal year to be appropriated into the existing Civil Legal Services Fund. The corporation provided legal services to a growing number eligible applicants; the number doubled from 41,000 to over 100,000 within 30 years. The funding sources for ALSC was comprised of state funds, local funds, federal funds, from private donations, and native organizations. He noted that the bill established a stable source of state funding. Representative Pruitt wondered how much money would be appropriated to the fund. Representative Edgmon replied that in the past year, court filing fees amounted to $2.2 million and 25 percent equated to $563 thousand. He noted that the current year's budget for the corporation was cut to $450 thousand. Representative Wilson clarified that the legislation did not appropriate money it only authorized the appropriation into the fund. Representative Edgmon replied in the affirmative. He offered that HB 154 created the receipt authority. Vice-Chair Saddler asked how often court filing fees were adjusted or changed. NANCY MEADE, GENERAL COUNSEL, ALASKA COURT SYSTEM, replied that the court system had not increased its filing fees in the past 10 to 12 years; the court system was in the process of implementing much higher fees effective July 1, 2015. She noted that last year's filing fees were $2.2 million and would increase an additional $1.2 million, which totaled $3.4 million. Co-Chair Thompson OPENED public testimony. DENISE DANIELLO, EXECUTIVE DIRECTOR, ALASKA COMMISSION ON AGING, spoke in support of the legislation. She shared that the corporation served 850 seniors in the past year. PATRICK REINHART, GOVERNOR'S COUNCIL ON DISABILITIES AND SPECIAL EDUCATION, ANCHORAGE (via teleconference), testified in support of the legislation. He believed the legislation would positively impact low income individuals with disabilities. He relayed that approximately 40 percent of the corporation's clients were disabled individuals. Typical services were provided for illegal eviction due to disability, assistance with civil protective orders to stop abuse, denial of federal healthcare coverage or benefits, and family caregivers in securing healthcare and other domestic services. He remarked that some clients had to be turned away due to lack of funds. Vice-Chair Saddler understood that many of the council's clients used Alaska Legal Services and wondered whether it would be helpful if the legislature implemented a similar funding source for the Alaska Disability Law Center. Mr. Reinhart responded that the agencies provided different types of legal services for the disabled. The Alaska Disability Law Center had a different revenue source and he did not know the answer. NIKOLE NELSON, EXECUTIVE DIRECTOR, ALASKA LEGAL SERVICES, ANCHORAGE (via teleconference), spoke in favor of the legislation. She shared that the agency was a non-profit agency that provided free legal services to low income individuals for 45 years. The critical civil legal services provided helped to stabilize families, secure safety and self-sufficiency and provided access to the civil justice system. The agency assisted parents who had been in abusive relationships, families with domestic paperwork such as enrolling children in school, and veterans denied benefits for disabilities. She expounded that the corporation operated with staff attorneys, a network of pro bono attorney's, and its self-help and community education network. The corporation served over 2,500 Alaskans in 162 communities. Last year ALSC turned away hundreds of families due to lack of resources. Eight-six percent of ALSC client's cases had positive results and the corporation was remarkably cost efficient. Each case averaged $600 due to resolving cases out of court 80 percent of the time. She furthered that ALSC attorneys were paid well below the market rate. Resources and services were leveraged in the amount of $500 million. She voiced that ALSC helped achieve justice for all and urged support for the legislation. Co-Chair Thompson CLOSED public testimony. Representative Edgmon corrected that the bill did not create program receipt authority; it established language to authorize the appropriation of funds from the court filing fees from the previous year. Representative Wilson thought the testimony was confusing. She believed that the legislature could appropriate as much money into the fund as the legislature wanted. Representative Edgmon replied that the bill created a funding mechanism for 25 percent of court filing fees to be appropriated to the corporation. The legislature did not guarantee the money. It provided the legislature with the authority to appropriate the money into the fund. Representative Wilson clarified that the bill did not limit the amount of money that could be appropriated into the fund above the 25 percent of court fees. Representative Edgmon replied in the affirmative. Representative Wilson clarified that the bill did not appropriate any money. Vice-Chair Saddler asked whether the sponsor was aware of the court systems intent to increase its fees. Representative Edgmon replied in the affirmative. Co-Chair Thompson clarified that there was no guarantee that the court system would actually increase the fees. Representative Pruitt declared that currently AS 09.17.020(j) required that 50 percent of awarded punitive damages were deposited into the general fund for use for the Civil Legal Services Fund. He wondered why the sponsor was creating another fund. Representative Edgmon replied that the intent of the bill was to provide a more solid, stable funding source in the future given the state's current fiscal difficulties than the general fund appropriation. He expressed uncertainty regarding the level of future funding for the corporation from the general fund. He noted that ALSC received over $1 million from the state in the 1980s and had to turn away hundreds of families due to the decline in state revenues. TIM CLARK, STAFF, REPRESENTATIVE BRYCE EDGMON, elaborated that at the time the Alaska Legal Services Fund had been established the capitalization was designed to come from punitive damages. In the last three years, the state had collected zero punitive funds and the fund was empty. Representative Pruitt identified that the legislation allowed for appropriations from both the punitive damages fund and the Civil Legal Services Fund. He wondered when the last deposit from punitive money was appropriated into the fund. Mr. Clark replied in the affirmative to the first question. He elaborated that the legislation did not "concretely" appropriate money into the fund and only provided an authorization to appropriate. He felt that the existence of the funds and appropriation authorization acknowledged the importance of the services the corporation provided to Alaskans. Vice-Chair Saddler wondered whether there was more than one organization that provided civil legal services to Alaskans. Mr. Clark was not aware of any other providers. He deferred the question to Alaska Legal Services. Ms. Nelson addressed whether there had been any appropriations from the punitive damages fund authorization. She answered that there had been one appropriation of $110,000 in 2011 from the years 2007 to 2011. Secondly, she replied that there were other organizations that provided free legal services in Alaska; however, Alaska Legal Services was the only statewide provider of comprehensive free legal services. She shared that other legal services providers delivered niche or restricted legal services. 2:55:35 PM Vice-Chair Saddler asked whether other legal services providers received money from the legal services fund. Ms. Nelson replied that to her knowledge the only appropriation was the $110,000 to ALSC. Representative Gara recalled that the constitution did not allow dedicated funds but pointed out that the legislature was inclined to "honor" accounts of this type when money was available. He though that HB 154 "worked better" than existing law because determining 25 percent of court filing fees was easily calculated. He related that even though the state was entitled to 50 percent of punitive damages; when parties settled cases most of the awarded settlement was described as compensatory rather than punitive damages. The current mechanism was designed to incentivize underreporting of punitive damages. He stated that the bill provided a quantifiable amount of money for deposit into the fund. Representative Wilson MOVED to REPORT HB 154 out of committee with individual recommendations and the accompanying fiscal note. HB 154 was REPORTED out of committee with a "do pass" recommendation and with one previously published zero fiscal note: FN1 (AJS). 2:58:30 PM AT EASE 3:02:03 PM RECONVENED