Senate Bill No. 652
(By Senator McKenzie)
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[Introduced February 19, 2007; referred to the Committee on the
Judiciary.]
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A BILL to amend and reenact §5-3-3, §5-3-4 and §5-3-5 of the Code
of West Virginia, 1931, as amended; to amend said code by
adding thereto a new section, designated §5-3-6; and to amend
and reenact §5A-3-13 of said code, all relating to requiring
the Attorney General to report to the Governor and the Joint
Committee on Government and Finance relative to contracts
entered into for legal services with persons outside the
Attorney General's office; requiring the Attorney General to
report to the Governor and Joint Committee on Government and
Finance upon the conclusion of contracts for legal services,
including a statement of fees involved on an hourly basis;
prohibiting the payment of fees in excess of five hundred
dollars per hour; requiring the Attorney General to submit
semiannual reports to the Governor and the Joint Committee on
Government and Finance concerning contracts for outside legal services; requiring the inclusion of information in the
semiannual reports concerning the nature of these contracts;
establishing the Attorney General's Litigation Support Fund;
requiring public accountability for funds received by the
Attorney General and others through judgment or settlement;
requiring applicability of the open records and open meetings
laws; providing for the administration and disbursement of
state judgment or settlement proceeds; and requiring that
contracts proposed by the Attorney General be approved as to
form by the Secretary of State.
Be it enacted by the Legislature of West Virginia:
That §5-3-3, §5-3-4 and §5-3-5 of the Code of West Virginia,
1931, as amended, be amended and reenacted; that said code be
amended by adding thereto a new section, designated §5-3-6; and
that §5A-3-13 of said code be amended and reenacted, all to read as
follows:
CHAPTER 5. GENERAL POWERS AND AUTHORITY OF THE GOVERNOR,
SECRETARY OF STATE AND ATTORNEY GENERAL; BOARD
OF PUBLIC WORKS; MISCELLANEOUS AGENCIES, COMMISSIONS,
OFFICES, PROGRAMS, ETC.
ARTICLE 3. ATTORNEY GENERAL.
§5-3-3. Assistants to Attorney General.
The Attorney General may appoint such Assistant Attorneys
General as may be necessary to properly perform the duties of his
or her office. The total compensation of all such assistants shall
be within the limits of the amounts appropriated by the Legislature
for personal services. All Assistant Attorneys General so
appointed shall serve at the pleasure of the Attorney General and
shall perform such duties as he
or she may require of them.
If the Attorney General seeks to obtain legal services of any
kind from any person who is neither a full-time Assistant Attorney
General on his or her staff nor a full-time employee of another
state agency, whether or not such person is designated at any time
as an Assistant Attorney General, he or she shall contract for such
services regardless of the amount of fees and expenses to be
incurred, and to the extent applicable, shall comply with the
general purchasing requirements under article three, chapter five-a
of this code. The contract shall be subject to the following
requirements: (1) The fee under the contract shall be charged only
on an hourly basis, based on a rate that shall not exceed the usual
and customary rate for such services, or five hundred dollars an
hour, whichever is lower, and which shall be paid only from the
budget for the Attorney General as approved annually by the
Legislature; (2) a statement of the reimbursement rate by the
Attorney General of expenses that may be incurred by the applicant,
including, but not limited to, items such as travel, telephone and
copying; (3) certification by the applicant of the hourly rate he
or she will charge under the contract and agreement to the reimbursement rate for expenses set forth by the Attorney General;
(4) certification by the applicant that he or she will agree to any
relevant statutory confidentiality requirements; (5) certification
by the applicant that he or she will submit an annual budget of
fees and expenses to be incurred for any matter that may extend for
more than six months; and (6) certification by the applicant that
neither he or she, nor any person in practice with the applicant,
represents nor may represent during the pendency of the contract,
a person who has a claim or punitive claim involving any matter for
which the applicant or any person in practice with the applicant
has been retained by the Attorney General. Consistent with the
general purchasing requirements, the Attorney General shall submit
a request for proposal when he or she seeks to obtain these legal
services, and the request for proposal shall include the following
elements: (1) A statement by the Attorney General as to why the
matter cannot be handled by the regular full-time staff of the
Attorney General; (2) a statement of the particular experience and
expertise required of the person or persons being sought under the
contract; and (3) the estimated total amount of time and fees to be
expended by the persons under the contract.
Nothing in this section creates or expands any rights of the
Attorney General that do not otherwise exist in this code.
All laws or parts of laws inconsistent with the provisions hereof
are hereby amended to be in harmony with the provisions of this section.
§5-3-4. Reports to Governor and Joint Committee on Government and
Finance.
(a) The Attorney General shall annually semiannually, on or
before the first day of May and November, deliver to the governor
and to the Joint Committee on Government and Finance a report of
the state and condition of the several causes, in which the state
or the Attorney General is a party, pending in courts mentioned in
section two of this article, or in any other chapter of this code,
as of the thirtieth day of December and June, immediately preceding
the first day of May and November, or closed or concluded during
the preceding six-month period. This report shall also include the
terms and conditions upon which the Attorney General has engaged
any person to perform legal services of any kind, whether or not
such person has been designated an Assistant Attorney General,
including a copy of all contracts for such legal services,
including the fees and expenses to be paid to these persons; and
the amount of judgments, settlements, costs and fees awarded by the
courts to the Attorney General or persons with whom he or she has
contracted for legal services, including any Assistant Attorney
General, in cases closed or concluded during the preceding fiscal
year of the state, and that amount paid to any Assistant Attorney
General, or other persons under contract with the Attorney General
to perform legal services, for representing the state or a public officer or employee of the state. This report shall also include
copies of reports provided in the preceding six months under
subsections (b) and (c) of this section.
(b) Whenever the Attorney General contracts for legal services
for a person other than as a full-time member of his or her staff,
in accordance with section three of this article, he or she shall
immediately deliver to the Governor and to the Joint Committee on
Government and Finance a list of the persons with whom he or she
has such contracts; a list of all persons who responded to the
proposal and copies of all communication in response to the
proposal; and a review of the current and prior relationship of the
Attorney General and his or her deputies with the persons to whom
he or she has awarded the contracts.
(c) At the conclusion of any legal proceeding for which the
Attorney General has contracted for legal services from a person
who is neither a full-time Assistant Attorney General on his or her
staff or other full-time state employee, the Attorney General shall
obtain from each such person a statement of the number of hours
worked on the case, all expenses incurred, the aggregate fee amount
and a breakdown as to the hourly rate based on hours worked divided
into fee recovered, less expenses, and submit the statement to the
State Auditor before payment is made.
(d) In no case may the Attorney General incur fees in excess
of five hundred dollars an hour for legal services from any person, nor expenses beyond the reimbursement rate set forth in any request
for proposal for legal services, nor beyond the allocation for such
fees and expenses in the annual budget appropriated by the
Legislature for the Attorney General.
(e) Nothing in this section creates or expands any right of
the Attorney General that does not otherwise exist in this code.
§5-3-5. Attorney General's Litigation Support Fund.
On the final determination of any cause in any of the courts
mentioned in the second section of this article, in which the
Attorney General appeared for the state, the clerk thereof shall
certify to the auditor the fee of the Attorney General which was
taxed in the bill of costs against the defendant, and when such fee
shall be collected it shall be paid into the state treasury and
placed to the credit of the state fund.
(a) There is established in the State Treasury a special fund
to be known as the "Attorney General's Litigation Support Fund."
(b)(1) The fund may consist of any and all moneys designated
by a court order as reasonable attorney fees and related expenses
received by the Attorney General pursuant to this section as a
result of any fees, fines, restitution, forfeitures, penalties,
costs, interest, or judgments collected pursuant to any civil
litigation, or any administrative proceedings, or in settlement of
any claim asserted by or against the people of West Virginia, the
State of West Virginia, or any of its departments, agencies, institutions, officers, employees, or political subdivisions
thereof. Moneys in the fund shall be available for expenditure
only upon appropriation by the Legislature in accordance with the
provisions of the West Virginia Constitution, article six, section
fifty-one.
(2) Notwithstanding any provision of subdivision (1) of this
subsection to the contrary, the fees, fines, restitution,
forfeitures, penalties, costs, interest, judgments or settlements
received by the Office of the Attorney General on behalf of the
people of West Virginia, the State of West Virginia, or any of its
departments, agencies, institutions, officers, employees, or
political subdivisions thereof that are in excess of the actual
expenses of the Office of the Attorney General pursuant to the
litigation or the issue settled shall, after the payment of any
attorney fees and related expenses to the Attorney General's
Litigation Support Fund as provided by subdivision (1) of this
subsection, be deposited in the treasury of the state to the credit
of the State Fund, general revenue, unless:
(A) The recovery or a portion thereof was on behalf of a
special fund established under the provisions of this code, in
which event the money shall be deposited in such special fund
established in the State Treasury;
(B) The recovery or a portion thereof was on behalf of or
required to be held in a trust fund, in which event the money shall be deposited in a special fund established in the State Treasury to
be held in trust;
(C) The recovery was on behalf of a political subdivision of
the state, in which event the remainder of the recovery shall be
transmitted to the treasurer of such political subdivision for
deposit in its general fund;
(D) Amounts were recovered as attorney fees and expenses
separate and apart from any amounts recovered by the state or the
Attorney General by a person not employed by the state who provided
legal services in the matter as a special Assistant Attorney
General appointed by the Attorney General for that purpose, in
which event, those attorney fees and expenses shall not be
deposited into the treasury of the state nor into the Attorney
General's Litigation Support Fund, but retained by the special
Assistant Attorney General; or
(E) The recovery or a portion thereof was for specifically
identified persons, in which event the money shall be deposited
into a pass through account in a banking institution designated by
and administered subject to conditions established by the State
Treasurer to ensure the accountability of the disbursement of the
funds.
(3) The actual expenses of the Office of the Attorney General
pursuant to litigation or the issue settled shall be certified by
the Attorney General to the Governor, the Secretary of the Department of Administration, the President of the Senate and the
Speaker of the House of Delegates.
(4) Notwithstanding any provision of this subsection to the
contrary, or any other provision of law, the Attorney General may
not expend the proceeds of judgments or settlements of any kind, or
any part thereof, for the use of the Office of the Attorney General
in excess of the actual expenses of the Office of the Attorney
General pursuant to the litigation or the issue settled.
(c) The Attorney General may expend moneys appropriated by
the Legislature from the Attorney General's Litigation Support Fund
for the performance of any of the powers, functions, duties, and
responsibilities of the Office of the Attorney General.
(d) The Attorney General's Litigation Support Fund shall be
placed under the management or administration of the Attorney
General for the purpose of performing any of the functions, duties,
powers, and responsibilities of the Office of the Attorney General
and all moneys deposited in the fund are available for
appropriation to the Office of the Attorney General.
(e) The appropriation of these moneys shall be in addition to
any moneys appropriated to the Office of the Attorney General from
any other sources.
(f) Neither the Attorney General, nor any employee of that
office, shall have any financial interest in the investment of
moneys in the fund nor receive any commission with respect thereto.
(g) It shall be the duty of the Attorney General to keep
detailed permanent records of all expenditures and disbursements
from the fund.
(h) On or before the fifteenth day of January, April, July and
October, the Attorney General shall cause to be filed with the
Governor, with copies to the Secretary of the Department of
Administration, the President of the Senate and the Speaker of the
House of Delegates, a full and complete account of the receipts and
disbursements from the fund in the previous calendar quarter.
§5-3-6. Public accountability for funds or assets recovered by the
Attorney General and other officer or agencies of the
state through judgment or settlement; applicability of
open records and open meetings laws; administration and
disbursement of state judgment or settlement proceeds.
(a) The Legislature hereby finds and declares that:
(1) Public accountability for funds or other assets recovered
in a legal action or settlement by or on behalf of the general
public, the state or its officers, agencies or political
subdivisions is appropriate and required, whether the character of
the assets or funds recovered is public or private;
(2) Accountability for assets or funds recovered by the
Attorney General or other officer or agency of the state is
essential to the public trust, and is even more critical when the
Attorney General or other officer of the state was a party to the action that resulted in the recovery by virtue of the public office
he or she holds;
(3) Public accountability demands the applicability of the
freedom of information law, article one, chapter twenty-nine-b of
this code, and the open governmental proceedings law, article nine-
a, chapter six of this code, so that the actions of individuals or
agencies who are charged with the administration of funds or other
assets are conducted in full view, and are open to public scrutiny;
(4) While it may be important that, in certain circumstances,
funds or assets received retain their character, identity, and
purpose, it is also important that the process by which funds are
administered be open to public scrutiny and be accountable to the
public; and
(5) The power to appropriate funds for public purposes is
solely within the purview of the legislative branch of government,
and the Legislature, as a steward of the budgetary process, shall
take steps to assure that settlements are handled in a manner that
assures maximum accountability to the citizens of the state and
their duly elected legislative representatives.
(b) Therefore, any other provision of the common law or
statutory law to the contrary notwithstanding:
(1) Whenever the Attorney General or other officer or agency
of the state is a party to or has entered his or her appearance in,
a legal action on behalf of the State of West Virginia, including ex rel. or other type actions, and a disposition of that action has
resulted in the recovery of funds or assets to be held in trust by
the state, through court action or otherwise, to administer the
trust funds or assets, for charitable, eleemosynary, benevolent,
educational, or similar public purposes, those funds shall be
deposited in a special revenue account or trust fund established in
the State Treasury. The Attorney General or other officer or
agency of the state or a person, organization, or entity created by
the Attorney General or other officer or agency of the state are
prohibited from administering trust funds or assets for charitable,
eleemosynary, benevolent, educational, or similar public purposes;
(2) Except as otherwise provided in this section, any funds or
assets not for charitable, eleemosynary, benevolent, educational,
or similar public purposes, of any kind or nature whatsoever,
including, but not limited to, public funds and private funds or
assets when recovered by judgment or settlement of a legal action
by or on behalf of the State of West Virginia, including ex rel. or
other type actions filed by the Attorney General or other officer
or agency of the state under their statutory or common law
authority shall be deemed public funds, and shall be deposited in
the State Treasury in the General Revenue Fund; and
(3) No funds to which this subsection applies when deposited
in an account in the State Treasury shall be disbursed without a
specific legislative appropriation of the deposited funds by the
Legislature while in regular or extraordinary legislative session.
(c) The common law, including the common law authority of any
duly elected statewide constitutional officer or other officer of
the state, is specifically abrogated to the extent it is
inconsistent with the provisions of this section.
(d) The provisions of this section shall not apply to actions
by or on behalf of the state or its duly elected statewide
constitutional officers or any other state official or agency, if
the recovery sought and received is for specific individuals
identified as parties to the action either by individual social
security number, other individual identifying number, or by the
individual's proper name.
(e) In the preparation of a judgment order that will result in
the recovery of funds or assets by the state, the Attorney General
or other officer or agency of the state who is a party to or has
entered his or her appearance in the action on behalf of the State
of West Virginia shall advise the court of the provisions of this
section.
(f) In the event of an extra-judicial settlement that would
result in the recovery of funds or assets by the state, the
Attorney General or other officer or agency of the state acting on
behalf of the State of West Virginia shall not agree to any terms
contrary to the provisions of this section.
(g) Notwithstanding any statute or common law to the contrary, and except as provided in this subsection, an elected
statewide constitutional officer or any other state official or
agency shall not file or participate as a plaintiff, petitioner,
party, intervening party, attorney, or amicus curiae in support of
any litigation challenging the constitutionality of this section.
State funds and employee time shall not be expended by any person
or agency in support of such a challenge. If the constitutionality
of this section is challenged, the Governor, President of the
Senate and Speaker of the House of Delegates, in their official
capacities, shall be the only named respondents in that litigation.
CHAPTER 5A. DEPARTMENT OF ADMINISTRATION.
ARTICLE 3. PURCHASING DIVISION.
§5A-3-13. Contracts to be approved as to form; filing.
Contracts shall be approved as to form by the Attorney
General,
except that a contract proposed by the Attorney General
shall be approved as to form by the Secretary of State. A contract
that requires more than six months for its fulfillment shall be
filed with the State Auditor.
NOTE:
The purpose of this bill is to require the Attorney
General to comply with certain requirements when entering into
contracts for legal services to be performed by persons other than
full-time Assistant Attorneys General or other full-time employees
of the state as well as modifying current statutes to require
greater legislative and executive supervision of these types of
contracts. Toward these ends the bill includes the following
provisions: (1) Requiring the Attorney General to report to the
Governor and the Joint Committee on Government and Finance relative
to these contracts; (2) requiring the Attorney General to report to the Governor and Joint Committee on Government and Finance upon the
conclusion of such services, including a statement of fees involved
on an hourly basis; (3) prohibiting the payment of fees to such
persons in excess of $500 per hour; (4) requiring the Attorney
General to submit semiannual reports to the Governor and the Joint
Committee on Government and Finance while requiring the inclusion
of information concerning the nature of these contracts; (5)
establishing the "Attorney General's Litigation Support Fund" from
items such as moneys received as attorneys' fees and related
expenses; (6) requiring public accountability for funds or assets
recovered by the Attorney General and other state officers and
agencies through judgment or settlement; (7) providing for the
administration and disbursement of state judgment or settlement
proceeds; and (8)requiring that contracts proposed by the Attorney
General be approved as to form by the Secretary of State.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.
§5-3-6 is new; therefore, strike-throughs and underscoring
have been omitted.
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