ENGROSSED
H. B. 4660
(By Mr. Speaker, Mr. Kiss, and Delegates Michael,
Staton and Frederick)
[Introduced February 26, 2004; referred to the
Committee on Finance.]
A BILL to amend and reenact §5-3-5 of the code of West Virginia,
1931, as amended; and to amend said code by adding thereto a
new section, designated §5-3-6, providing for the disposition
of funds or 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; establishing the
attorney general's litigation support fund; providing for the
deposit of certain money into the fund; providing for the
deposit of certain money into the general revenue fund of the
state and exceptions thereto; requiring certification, records
and reports of certain monies recovered and prescribing the
use thereof; requiring certain disposition of funds to be held
in trust; limiting certain powers to administrate certain
funds; requiring legislative appropriation of certain funds;
requiring certain advice be given to courts; prohibiting
agreements to settle contrary to law; limiting actions and
expenditures of funds public funds to challenge the constitutionality of the section; and limiting respondent
parties to such action.
Be it enacted by the Legislature of West Virginia:
That §5-3-5 of the code of West Virginia, 1931, as amended, be
amended and reenacted; and that said code be amended by adding
thereto a new section, designated §5-3-6, all to read as follows:
ARTICLE 3. ATTORNEY GENERAL.
§5-3-5. Fees to be paid into state treasury.
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.
§5-3-5. Attorney General's Litigation Support 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 monies 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. Monies in the fund shall be available for expenditure
only upon appropriation by the Legislature in accordance with the
provisions of 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 for 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 to ensure the
accountability of the disbursement of the funds by the state
treasurer;
(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 monies 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 monies deposited in the fund are available for
appropriation to the office of the attorney general.
(e) The appropriation of these monies shall be in addition to
any monies 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
monies 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.