House State Agencies & Govt'l Affairs Committee Part I
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Bills discussed (1)
| Bill | Title | Sponsor | Status |
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HB1046
· 1 mention in chapter
Matched: “HB1046”
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Pre-2017 bill |
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Representative Clark Hall
Unverified
0:00
Put on her sunglasses, yes ma'am. Anyway, are you ready to continue your discussion before we go back to the lady from Conway who was against your bill? You're going to get to refresh the committee, and then we're going to have to turn it over to going back to the audience. Is that where we left off? You
have the mic, Representative Eddie. Thank you, Mr. Chair, Madam Vice Chair, members of the committee. I'll
Representative Greg Leding
Unverified
0:24
allow the gentleman to introduce himself briefly before I begin. Would you state your name and
Eddie Parsley
Unverified
0:32
My name is Eddie Parsley. I'm here representing the Arkansas Professional Firefighters and myself. I am a captain with the Pomba Fire Department.
Representative Clark Hall
Unverified
0:43
Question. Was this not the – this wasn't the same witness you had Friday, I don't think?
Speaker 9
0:49
No. That gentleman is in D.C. this week and
Representative Clark Hall
Unverified
0:54
is unable to join us. Okay. Just making sure we have a clarification with the members, If they want to raise an objection, we have the opportunity because we're halfway through your presentation.
Representative Lennon, do you have any new comments you'd like to make to the committee before we move to the audience? I don't have any new comments, but if anybody
Representative Greg Leding
Unverified
1:16
needs me to refresh them on what this bill is about, what the main goal is. That would be
Representative Clark Hall
Unverified
1:21
appropriate if you would just give us a brief overview of what you're trying to do where we can refresh our memories, if you
Representative Greg Leding
Unverified
1:28
would. What we're trying to do essentially is enforce the use of the eligibles list. If I'm a fire chief and I have a vacancy come along, I should have in place an eligibles
list of the top three people who tested and scored and did the best. And we're talking about enforcing the use of that list and preventing the use of a temporary appointment to bypass those individuals on that list. It's
Representative Clark Hall
Unverified
1:53
just about giving people a fair shake. MR. Any questions from the
Representative Linda S. Tyler
Unverified
2:01
committee? Will you take Representative Tyler? Thank you. Thank you, Mr. Chair. Representative Letting, on page five, let me get to it, line 14, where you say the promotion shall be made within 45 calendar days of a vacancy created by death, termination, resignation, demotion, or retirement, and I think you've added promotion there,
unless the position is determined to be eliminated. Would you tell us a little more about what you mean when a position is eliminated? As I think about the city budgets, we might have a budget during the year, but the cash flow might not come in as we expected, and we decide not to fill some positions. Do you see that as a position elimination? I'm going to allow the gentleman with me to address that.
Eddie Parsley
Unverified
2:56
Yes, I think that would be appropriate to say that the position was not filled because of funding, or some cities are having problems funding their entire apartments, and they're having to trim some of the positions, and this doesn't force them to fill that position. It helps them to give them a little leeway to alleviate that, and therefore their budgets aren't strained. Mr. Chair, may I do one follow-up, please?
Representative Linda S. Tyler
Unverified
3:28
Does that also mean then that if we do have that situation where the cities have shortfall in funding, they may decide that
because of extenuating maintenance costs or whatever, they're going to, if they have a position that comes open in staffing, they're going
to move some funds from staffing to operations. That would
Eddie Parsley
Unverified
4:00
as well. I'm not sure I completely understand your question.
Representative Linda S. Tyler
Unverified
4:04
Let me try it one more time. Okay. We've got the shortfall in the city, and we have someone who quits, and we're fighting ourselves short in funds in the city. So we're going to move the funds from staffing to maintenance, I'll just use that as an example, and therefore not backfill that position. Is that appropriate under your bill? Yes, I believe that's correct. All right. Thank you very much. Is there any other questions for the committee?
Representative Clark Hall
Unverified
4:36
Do we have any signs up? Representative, if you would, if you'd step to the side, we have some those who will continue with those who were against the amendment. Anyone in the audience who is against this amendment? If you would, if you'd come back and take your seat at the end of the table, state your name for the record again, and you may proceed. Yes, ma'am.
Can you turn your mic off and I'll leave Memphis
Lisa Mabry-Williams
Unverified
5:18
a little button there, it should be green. My name is Lisa Mabry-Williams. Thank you, Ms. Williams. I'm with the City of Conway. I'm going to just kind of pick up where I was last week. During downturn, cities use every budgetary tool they can to preserve the existing jobs
and services. And again, this could include hiring freezes that last beyond 45 days. Cost savings through job attrition can dramatically help preserve jobs. And when cities are facing economic challenges, we frequently ask departments that have open positions if they can postpone filling a position for a period of time so the funds can be used for more critical things such as replacement or repair of equipment, meeting payroll, numerous
things. When the chief has the opportunity to promote an employee into an open position, that chief needs sufficient time to consider the top three candidates on the list. The decision The decision the chief makes will affect the department for many, many years to come. The chief needs to have adequate time to interview the candidates, research their work history, and make a decision that will provide the most benefit to the department, the department's employees, the city, and its citizens.
Forty-five days does not give the chief sufficient time for this due to vacations, various leaves, and the current economic impact the promotion will have on the city or the municipality. In the event an unexpected vacancy occurs in the absence of a current eligibility list and the city needs to make a
Speaker 30
7:10
temporary promotion until the promotional list is developed, 45
days does not give a city enough time to develop a new eligibility list. So we would ask for 120 days. Would you
Representative Clark Hall
Unverified
7:28
take questions, ma'am? Yes, sir. Is there any questions, Committee Representative Wilkins? You
know, 120 days seems like a long time to me to wait to
fill a position. And isn't it true that these people are already hired?
They're not somebody new that the chiefs don't know. They have a work record. I'm sure they have evaluations in place over a period of time. So it looks to me like, just in my opinion, that it would be 45 days is enough, but I don't understand where you're coming from because you're not promoting new employees. Is that right? That's correct. Okay. Well, I supervised
a lot of people one time,
and that wouldn't have been a problem for me, you know, in
Speaker 36
8:22
state government. But thank you anyway, ma'am. Any other
Representative Clark Hall
Unverified
8:28
questions for the committee? Representative Cheatham? Wait a minute. Representative Letting, are you ready to close for your bill? Thank you, ma'am, for coming down today. Thank you. There's not any more questions. Thank you. Are
Representative Greg Leding
Unverified
8:47
you ready to close for your bill? MR.
Yes. I would just like to echo Representative Wilkins' comments concerning the timeframe. We're not talking about brand-new people. We're talking about people with whom the Chief has an existing working relationship. So I too feel that 45 days is sufficient time to choose from those three individuals. MR. Representative Cheatham. Yeah. MR. Mr. Chair, I have a motion at the proper time. MR. Let's hear your motion. Motion do
Representative Clark Hall
Unverified
9:16
pass as amended. We have a motion on the floor. Do pass as amended. All in favor say aye.
Aye. Any opposed? You passed your bill, Representative. Thank you. Yes, sir. Members, we're going to a special order of Representative English on 1046. While we're attending, we have an amendment. Is that right? We have an amendment that's going to be handed out by the committee. Representative English, I hate to inform you, but I've got to go to a short meeting that
I've been summoned to. And so if that's the case, I'm going to turn it over to a co-chair here. And I'd like to remind the members that we're having lunch brought in today, so plan on being here a little later. We're going to hear the constitutional amendments within an hour and a half and try to get that that summed up before we can move forward. I'm going to turn it over to my coach here, and I will be back in about 15 or 20 minutes. Thank you. Thanks.
Representative English, you're recognized to present your bill. Thank you, Madam Chairman. I am Jane English,
Representative Jane English
Unverified
11:06
District 42 State Representative, and I have with me Frank Erie, who is the legal counsel for the legislative audit.
And this bill, 1046, is an act to provide that cash funds receive... Excuse me, Representative English, let's take care of the amendment first. Oh, I'm sorry. This is an amendment that basically takes the retirement systems out of this bill. Are there questions from the committee? Representative
Klemmer, you're recognized. Move to pass on the amendment.
Anyone in the audience wishes to speak for or against the amendment?
Okay. Are you speaking about the amendment, sir? Okay. to the table and identify yourself please I am
Speaker 58
12:11
George Hopkins executive director of the Arkansas teacher retirement system you know you know since I have not had a chance to see the amendment and have learned in the
legislative process that what is said in amendment what how do men explain and what it does is sometimes different you know I would just ask an opportunity to see the amendment where I can clarify that the amendment really achieves its intended goal and I had to have this amendment adopted without you know saying that until I can clarify that the Arkansas teacher retirement system is specifically excluded that
Speaker 59
12:45
the teacher retirement system will continue having difficulty with the bill okay we'll give
you a minute to look at the amendment Sorry, I'm having trouble with my microphone here. Representative Klemmer made a motion to do pass
on the amendment. Other questions from the committee?
All those in favor, please say aye. Any opposed, nay. Your
Representative Jane English
Unverified
13:43
amendment passed. Thank you. This is an act to provide the cash funds received by constitutional officers or state agencies as a result of an award by the court or a settlement agreement or subject to appropriation by the General Assembly and for other purposes. What we need to have is not separate agencies with their separate funds.
They all need to be appropriated by the state legislature as part of the Treasury. One of the things that I think has happened is that there's been a false sense that settlement agreements are signed off on by judges, and settlement agreements are only between two parties that are then signed off by a judge rather than by the folks who have made the
settlement agreement. And I had to ask Frank Airy to help me with the process to begin to understand what this process is for settlement agreements and how that money came through to the states. So I would ask him, if you don't mind, to speak to that. MS. Yes,
sir. Please identify yourself and who you're with for the record. MR. Thank
Speaker 66
15:05
you, Madam Chairman. I'm Frank Airy with the Division of Legislative Audit.
As Ms. English knows, I need to first clarify at the request of the Legislative Auditor, Roger Norman, our committee, the Legislative Joint Auditing Committee, has taken no position on this bill. Therefore, I am not here to speak for or against it. However, Ms. English did come to our office and ask us to take a look at this legislation and try to explain the process by which these funds became available to any Attorney General, not just ours, but any Attorney General. I looked at three separate documents.
Two of them are judgments that were agreed to between the parties involved. One of them involved Merck & Company from May of 2008. A second one involved Airborne Health in December of 2008. The third document I looked at was simply an agreement that involved all the parties. It involved MoneyGram payment systems. I'm not certain about the date, but it was sometime in the summer of 2009. If I could, I think you can best compare this process to divorce proceedings. Typically your judge doesn't care who gets the bedroom furniture.
What happens is the parties get together, they negotiate a settlement, and the judge signs off on it. That then becomes his order. However, what is actually in that order was agreed to by the parties in the first place. I think the process revealed by these three documents is very similar. In none of these documents did the judge say, this is how you will divide this money and this is what will happen to it without the party's agreement. In each one of them, what happened was the respective attorney generals sued a defendant.
They decided to settle the case in an agreement that was presented to the judge. They talked about where the money would go, and the judge signed off on it. Again, I have no indication from these documents that the judge really cared what happened once the money went to the respective states. That was an agreement by the parties. And that is what I had, after speaking with my boss,
Speaker 67
17:11
agreed to explain on Ms. English's request. Thank
Representative Jane English
Unverified
17:16
you, Frank. I think one of the things that we all have to realize is that state
resources are being used in these lawsuits, and what doesn't happen is that the money money doesn't come back to the specific folks who have been part of that class action suit, but rather to the state. And it is my feeling that those resources and those monies should come back to the state and should be appropriated by the General Assembly.
Representative Cheatham, you're recognized for a question.
Representative Eddie L. Cheatham
Unverified
17:55
Thank you, Madam Chair. I guess I just need a
little understanding, I guess. I thought when the state, usually the Attorney General is one that pursued legal action against someone that's a strong citizen of the state, but does the Governor's Office, Secretary of State's Office, do they also do things like this, or do they receive cash funds from settlements, I guess, is my question.
Representative Jane English
Unverified
18:21
This would only cover those cases for any state agency that might
be part of a class action suit or an award by a court.
And as we have taken out the retirement systems, all the retirement systems, because many of some of those are involved in legal cases that have gone on before, and those funds all go back in to the investment pools for the retirees. So we've actually had
Representative Eddie L. Cheatham
Unverified
18:49
cases against these offices in the past? Never have. Never have.
Representative Jane English
Unverified
18:55
No, it's not that it would be that somebody joined into a suit. It's probably unlikely that the Department of Economic Development is going to file a lawsuit
or be part of a class action suit. But this
just covers everybody. All right. Thank you. Representative
Speaker 75
19:24
Lee, you're recognized for a question. Thank you, Madam Chairman. So Representative English and Mr. Airy, let's walk me through how something like this happens. For example, maybe you can use Merck as the example.
The Attorney General, I'm assuming that was the Merck
Speaker 66
19:42
case? Yes, Representative Lee. The Attorney General with a bunch
Speaker 75
19:49
of other State's Attorney Generals. Okay. They filed a class action lawsuit and received an award. The award was then returned back to the State and
Speaker 79
20:02
put into a fund. If I could, Representative
Speaker 66
20:06
Lee, in that particular case, the settlement was $58 million. Arkansas's share was over $1.2 million. Paragraph 23 of that order provides
what happens to the funds when they come back. There's a provision that they can be used to pay attorney's fees involved in the lawsuit, that sort of thing. The funds can go to a consumer protection fund, consumer education. And there are some other things. And the last clause says, or for other uses permitted by state law at the sole discretion of each signing Attorney General, and that was a pretty standard form or phrase that I saw as part of the other two agreements as well. Oh, okay.
Speaker 75
20:47
So it went into a fund at the Attorney General's office in this particular example, and what did you call that? Community education, you called it? Yes, ma'am. Okay. Can you tell me how, for example, in that particular case that you brought, of the $1.2 million, how was it divided in that case? Ms. Lee, I can't tell you what
Speaker 66
21:13
happened. If you're asking what happened after they got to the AG's office, I'm not certain about that.
Representative Jane English
Unverified
21:22
know? I have no idea. I don't know that anybody, I haven't seen any records of where that money is, how it's spent, how much money is there, or what kinds of programs
Speaker 75
21:35
it's used for. Okay. So, Mr. Airy, you're saying the audit just sees the balances. That's all you audit. Once it gets to the Attorney General's office, the audit
Speaker 66
21:47
stops. Representative Lee, remember, I'm just the office poor, dumb history major.
what happens, I'm not certain. My understanding is, though, that when our auditors go, they will pull certain funds kind of on a test basis, certain accounts just as representatives of the whole, and they will look at how funds are spent. I do not know personally whether or not they look at whether those funds come from settlement agreements or regular appropriations by the General Assembly. I'm not certain about that. However, I can certainly get that information
Speaker 67
22:17
for you if you'd like for me to. MS. Okay.
Thank you for answering my questions. Thank
Representative Donna Hutchinson
Unverified
22:32
you, Madam Chair. MS. Representative Hutchison, you're recognized for questions. MS. Thank you, Madam Chairman. I just came from Joint Budget where we were asking, does anyone know how much money is floating around in these agencies and departments? We're discovering we really don't know where all the money is. So I'm interested in this. And when this judgment is made and the judge says Arkansas gets $1.2 million
and part of it goes to attorneys, the judge doesn't decide where it goes. Correct? After that? Representative Hutchinson, as I
Speaker 66
23:14
read these agreements, the judge signs off on the language that everybody agrees to, and the language will include things like, okay, you can take your attorney's fees and cost in bringing the lawsuit off the top. Then you can spend it for things like consumer education.
Representative Donna Hutchinson
Unverified
23:32
I'm a professional mediator before I had this job. Do the attorney generals, they get together and decide where this is going to be spent, and then the judge just signs on to their agreements? Yes.
Speaker 66
23:45
Well, Representative Hutchinson, as far as I can tell, they decide on how this language will read, but the language gives them some discretion in how they spend the funds once they get back
Representative Donna Hutchinson
Unverified
23:58
to their respective states. Correct. So the judge isn't really declaring they have to spend the money this way.
It is part of the compromise that the attorneys have worked out themselves, and then the judge signs on to it. In the
Speaker 66
24:14
three examples I looked at, yes, ma'am,
Representative Donna Hutchinson
Unverified
24:17
that's what happens. So there would be no problem if the state of Arkansas said, since the attorney general represented the state, these funds that are returning to the state outside of attorney's fees, they would go back to the state coffers.
Speaker 76
24:34
Ms. Hutchinson, I can't think of a legal reason why that
Speaker 99
24:39
would be a problem. Are there any other states
Speaker 66
24:43
that do that? I did look at a fourth document that did not involve Arkansas. It was a settlement agreement, again, involving other states. But as an example, the state of Massachusetts, where its money was spent was pulled out separately compared to everybody else who had the pretty standard language that I referred to a minute ago. So there's at least one example out there
of where one state had to be treated differently, and that's
Speaker 99
25:12
what happened. MS. So our Attorney General could say, gentlemen, according to my state laws, it's already been decided what
Representative Donna Hutchinson
Unverified
25:18
we're going to do with this money. MR. I can't think
Speaker 76
25:22
of a legal reason why he could not say that. MS. All
Speaker 101
25:32
right. Thank you very much. representative wilkins you're
recognized well actually my questions were along the line of representative hutcheson but
i've read this thing over a couple times and this is just strictly who do you trust do you trust the state agencies to spend their money wisely or do we want to appropriate it from the General Assembly. Is that right, Ms. English? MS. That's correct. Thank you.
MS. Representative Steele, you recognize your question? Thank you,
Representative Tracy Steele
Unverified
26:12
Madam Chairman. You were talking a little bit about these agreements,
and they come in the form of an agreed order that the judge signs off on. It makes no difference from a legal perspective whether a judge has an order over the objection of both parties or whether he has an order that everybody has agreed to. Is that correct? Yes, sir. The legal effect's the same. And if we had some law that said we were going to appropriate the money and the court order dictated how it was going to be appropriated, the court order would govern that, would it not?
Speaker 66
26:47
Representative Steele, I haven't worked out, you know, if the AG has a duty under state law to see that the funds go here, but the judge says, I want the funds to go there. You know, where's the AG's duty then to be involved in that settlement versus continuing the litigation? I mean, those questions I haven't worked out, but those are the kinds of questions I think that issue would raise. I would
Representative Tracy Steele
Unverified
27:09
think just in terms of checks and balances, if a court orders that funds from a lawsuit are going to a certain place, it would be – we would not have the authority to override that court order by appropriating some other place, would we?
Speaker 66
27:21
No, sir. I'm not going to tell you what you can't do vis-a-vis a judge, although I think you're right. The court order has a lot of, I mean, obviously would have to be paid attention to. But the question then becomes if you have told the AG what he or she cannot do, what role does the AG then play in litigation where the judge says do something else? I mean, he has a duty under state law to do certain things or see that they are done, which may call into question whether he or she could then proceed to be involved in that litigation.
Representative Nate Steel
Unverified
27:54
But in these settlement negotiations, we don't always know who had the idea that this got into the settlement agreement or who had the idea that that got into
Representative Tracy Steele
Unverified
28:03
the settlement agreement. So if we're going to dictate how the AG goes through settling cases, I just can't imagine how we would do that. I guess we'd have to send a representative into the conference room with him and make sure that he only offers certain things that the General Assembly has decided he can offer as part of that settlement? And I guess that's not a question, but let me ask this question.
No matter what we pass here in the form of statutes, it seems to me that it could easily be circumvented by a settlement agreement that would dictate where the funds go. Could it not? A
Speaker 67
28:35
court order in another state is going to be obviously something the AG has to pay attention
Speaker 66
28:41
to. Now, audit does go and check for compliance with state law, and this is the kind of thing we check. So there would be some
Speaker 67
28:48
indication back to this body about compliance with state law. Okay.
Representative Tracy Steele
Unverified
28:54
And finally, this question is for Representative English. Are you aware of any specific situation where this authority has been abused or where you think money has gone somewhere it shouldn't go? I guess before we pass any law, my question is, is it necessary? I haven't seen any, I haven't heard any testimony that this discretion has
Representative Jane English
Unverified
29:16
been abused. Are you aware of any incident? I think sometimes there are pots of money out there that folks
have access to that may be used for charitable donations,
for television ads, for different kinds of things like that that we probably wouldn't pay any attention to. But I don't think anybody in this legislature or most state agencies can take some money that belongs, that is part of the state coffers, so to speak, and give it out just as they please without it having gone through our budget process or whatever the case may be. There have been some things where some donations have been given to some very worthy causes,
but that really isn't up to an agency to make those decisions out of state funds. I guess my point would be
Representative Tracy Steele
Unverified
30:10
that the judge has already made the determination, has he not? Do you not think the judge in that case has already decided what's appropriate to spend the money on, since generally these orders do
Representative Jane English
Unverified
30:23
say where the money's going to be spent? I think it goes back to what Mr. Airey has said, is that according to state law, and one of the settlement agreements that I read said exactly that, according to the state's law.
So it would seem to me that the Attorney General from here or Colorado or wherever it is would know what those state laws are that he has to operate under when he is making a settlement agreement. In one of these from Massachusetts, part of the settlement agreement was a $479,000 grant to some specific thing. So there's a lot of latitude in there, but obviously if our state laws say that this is how the money has to be returned to the state treasury or to the appropriator, whatever the case may be, then that's – and there's nothing that says out of that could not come a consumer education program or any of the
these other things that the Attorney General's Office would want to do, just as Medicaid or any other program that any other state agency wants to do, we go through the appropriation process and supposedly know what
it is that they're doing, what that program is. One more question, if all right,
Representative Tracy Steele
Unverified
31:38
Mr. Chairman. Assuming we did dictate how this was going to be spent, and same question I asked Mr. Erie earlier, if a judge doesn't care what our state law, he's in Nebraska or somewhere else, and he orders that the money be spent
for, say, consumer education for tobacco or for some other case. If a judge has decided that that's how the money is going to be spent, you agree that it would no longer be up to us to appropriate it some other way, do you not?
Representative Jane English
Unverified
32:07
MS. I don't agree. I think that – I'm sorry, but I think what you're doing is you're taking off the table, just as Mr. Aries said, a divorce case where this is my bed and this is your table and we have agreed to these things.
This is our settlement agreement and the judge has, he doesn't care and it's the same thing about whether who has the chair and who has the table. He doesn't care. He just wants to know that you all have agreed to that thing and that's pretty much, when you read these settlement agreements, that's almost exactly what's happened is that the attorneys general from all of the states who were involved in that lawsuit make that determination amongst themselves, and they sign off of it, and the judge signs off then on what they
have determined that settlement agreement to be. So he's not making it, he's not dictating anything. I guess I have a little bit more
Representative Tracy Steele
Unverified
33:00
faith in judges than you do, but I believe that a judge would care and would make an appropriate judgment call on where the money goes, and I would argue that if the parties were to come to him with a settlement agreement that was unreasonable or that spent money in a way that the judge didn't believe was appropriate, he wouldn't accept that settlement agreement. Do you not agree? MS. That may be in some cases. MR. Thank you, Mr. Chairman. Thank you, Ms. English.
Representative Tiffany Rogers
Unverified
33:25
REP. REP. REP. REP. REP. REP. REP. REP. REP. REP. REP. REP. This caught my attention when Representative Hutchinson made the reference about being in joint budget and trying to figure out where the money is and how much state agencies have and that it's floating around out there and no one knows how much or what. But don't you think that if we're giving that discretion across the board to make that even broader and wider that instead of the AG's office having that discretion about how this money is used, then you're making it broader and wider by distributing it out to all the state agencies.
So in essence, it exacerbates the problem about what. I think our
Speaker 55
34:16
role as legislators is to have oversight of the funds that are appropriated here
Representative Jane English
Unverified
34:21
in the state of Arkansas and all the money that comes in. With all of our boards and commissions, they all take cash in, and all of the funds, whether they've got an overage or not and they aren't using all the money that they need at that appropriate time, We know where that money is, supposedly, and we appropriate for their salaries and to run their programs and things like that.
This should not be any different than any state agency we have. Now, obviously, I'm sure there is lots of money floating around, but money that's a – if we wanted to have – the Attorney General wants to have a program in consumer education, then we ought to know what that program is. We ought to know how much money is going into it, how many people does it take. to be able to run that program. What are the results of that program? Who are you serving? The same thing with advertising and doing consumer ads on television. I don't see that we're adding more money to be floating out there. I think what we're looking for is transparency and some control over those resources.
Representative Tiffany Rogers
Unverified
35:30
Do you have objection, though, in how the AG's office utilizes these funds? I think we need to know
Representative Jane English
Unverified
35:39
what kinds of programs they're running, how much money we ask every agency to tell us, how much you're spending of these funds for salaries, for travel, for advertisement, for whatever it is they're doing or running their program. We have no idea. And so, to be honest with you, I have not been able to find out any information at all about how much money comes in or where it goes.
And I'm not sure that even the state auditor, legislative auditor, has been able to find that out. It's a totally separate fund out there from Medicaid fraud or any of the other programs that we go through the process of appropriating money
Representative Tiffany Rogers
Unverified
36:26
that are run that are consumer protection ads
that give us warnings and give us advice on how to – that's where I'm – I
Representative Jane English
Unverified
36:34
didn't know. I don't have any problem with
that at all, any more than I have any problem with the Department of Economic Development doing their national ads on TV or running ads in magazines.
The difference is that we know what they're doing and how much money has been appropriated for that. If they have $750,000 in their budget for advertising, we know that, and we know pretty much where they're spending the money. And that's the only thing I'm asking, is that we have the same kind of accountability for these funds that are coming in. We know how much they are and where
Speaker 55
37:09
they're going. Thank you. Thank you, Mr. Chair.
Representative Debra M. Hobbs
Unverified
37:16
Rep. Hobbs. Thank you, Ms. Chair. This is a very interesting discussion. But if a judge were to rule, this money had to go for, say, consumer education. But we had the law saying it needed to go to general revenue. I mean, could the legislative body, not then, like we do a lot of appropriations, kind of a pass-through, appropriate that amount of money to whatever program the judge has ruled upon? Representative
Speaker 66
37:51
Hobbs, if I understand your question, if state law says we get to appropriate
it and the judge says send it to a specific program, yes, ma'am, I don't think anything would keep the legislature from coming along and doing, you know, sanctioning what the judge has ordered. Now, Representative Steele, he has a point. If a federal judge orders the state to do something, federal law is going to trump state law. I mean, you have instances like that where, yes, what the judge orders is going to matter more. But keep in mind that any state official has a duty to follow the law that you guys enact as well and to see that that law is followed.
And I guess that's my point that I haven't thought through, but I would say keep in mind there's a duty by the state official as well to see
Representative Debra M. Hobbs
Unverified
38:37
that state law is followed. Okay, so kind of following up then, like I said, even if the judge orders the state judge says this is where it needs to go, the legislators appropriate the money to that program, then we have followed the judge's ruling. It doesn't necessarily have to come directly from the AG's office. Well, since we're talking about the AG's office, I know there's other agencies on here, too, but is that correct?
Speaker 66
39:01
Yes, ma'am. Again, though, if it's a federal judge ordering something, the AG may have have a duty to follow that regardless of what anybody else tells the AG to do. In that specific situation, yes, ma'am, I think he would have to follow what the federal judge told him to do. Okay. Thank you. Thank you, Mr. Chair.
Representative Linda S. Tyler
Unverified
39:27
Representative Tyler. Thank you, Mr. Chair. I have a couple of questions, if I may. Using your divorce analogy, there are, as I think about this, these settlements, there are actually three parties to this settlement.
It's the state attorneys general and then Merck. We've been using that example. And then, of course, the judge is presiding over that. So, I mean, I don't, the judge might not care who gets the chair
and who gets the table. But I'll tell you, if the ex-wife gets the table, I don't want the ex-wife to get the table. So I think Merck might have
some ideas about, in order to settle this, to further their interests,
they want to direct where that money is spent as well. So they are a party to
Speaker 66
40:26
that agreement, are they not? Oh, yes, ma'am. The parties
Representative Linda S. Tyler
Unverified
40:30
care deeply what happens to the money. So it's not just the attorney's general gets in a room and say, here's where we can send our money and collaborate on that. Merck is a part of that agreement.
Speaker 66
40:43
Yes, ma'am. But, again, any given attorney general is going to have a constitutional duty to follow state law
Speaker 67
40:49
when they're engaging in those negotiations. Yes,
Representative Linda S. Tyler
Unverified
40:55
sir. I understand that. And I'm sure I'll think about my second question in a
Representative Donna Hutchinson
Unverified
41:07
little while, and if I do, I'll raise my hand. Thank you very much. Representative Hutchison. Thank you, Mr. Chairman. I guess I've been in politics too long. I've become rather skeptical. We at the House, I think, have released our GIF funds.
We've decided, and I congratulate the House, there will be no earmarks coming from the House. But I can see this pool of money, doesn't matter if the AG is Republican or Democrat, it is basically his earmarks, and he can use it during election time, before election time, just as earmarks were used by the House to have pictures taken and him holding a check. And do you think there's some possibility that this can be used as Attorney General earmarks just as earmarks were used in the House?
Representative Ann V. Clemmer
Unverified
42:02
Yes, I do. Representative Clemmer, did you have a question?
Yes, sir, for a while. That's okay. Okay. I have one question, but I have a follow-up on Representative Tyler's question on the divorce example, since we're getting all into this analogy. I don't
understand if Mark's paying, I don't figure they care one whit what the Attorney General's do with the money.
I mean, I guess I should say, why do they care? It seems to me it's kind of like the ex-husband. We're in the divorce analogy. If he's giving the money to the ex-wife, I mean, what he cares about is what he has to pay. Not necessarily, it may bug the crap out of him that she's buying clothes with it. But what he cares about is his bottom dollar, what he has to pay, it seems to me. So it seems that I don't understand why Mark would have an interest in directing where the money goes. And if they would, in this example, explain that to me, please.
Speaker 66
43:10
But I still have a follow-up. Representative Klemmer, some ex-husbands care what the kids think. In this instance, I suppose Merck could be concerned that the funds be used for public relations purposes so that the rest of the world would understand what great guys they are by settling this lawsuit. I mean, there could be reasons and motivations like that out there why Merck may care. I'm not in that field. I don't know for sure, but it could be that in some instances. Okay, I'm just not sure I'm buying all this divorce analogy.
Representative Ann V. Clemmer
Unverified
43:41
Maybe we just need to leave it alone. Sometimes we go too far, but I appreciate it. I like the examples. My question is to someone, I guess Representative English, Mr. Airy, is there a reason that, and enlighten me here, I mean I may be way off base, that we don't appropriate the money or we don't treat this settlement money as though it is the cash funds. We have all these agencies out there that collect dues and have resources of their own,
but we still appropriate back to them those cash funds. Is this treated differently, and
if so, can you tell me why? Representative Klemmer, I didn't research
Speaker 66
44:34
that. That wasn't originally what I was asked to do, but my understanding of cash funds based on other audits we've done, some agencies are just permitted to get cash funds, and whether you appropriate those funds or not I think is up to you.
I can't think of a constitutional reason why you could not appropriate them, okay? The Constitution says you have to appropriate funds that come into the Treasury. Well, cash funds typically don't come into the Treasury, so that constitutional provision does not kick in. But you still have the authority, if you want to, to appropriate those funds. I believe the Supreme Court has said that. What may be going on here is that by virtue of a court order, an attorney general in some given state has authority to dispose of funds.
I mean, I haven't researched that, so that's just off the cuff. But that's the best I can
Representative Ann V. Clemmer
Unverified
45:33
do. I guess I'm just seeing that we're struggling to make ends meet
and we're struggling to figure out who gets funded and who doesn't. And it's always rather a relief to go, okay, that's money they're bringing in. and we're just kind of giving that back to them, and we can leave that alone.
But we take that into consideration when we fund those agencies, and it seems to me, and I'm asking still, why the money the Attorney General's office brings in isn't considered part of their budget, or are we allowed to even take that into consideration? Do we have an accounting for that money that comes in? And I don't know that that takes, that even plays a role in our budgetary considerations, and I'm asking that.
Representative Jane English
Unverified
46:31
I don't think there is an accounting of the funds that come in, and this isn't just a brand-new thing. This is, I mean, forever it's been going on. But as you say, we're all getting to the place where budgets are becoming tight, and we're looking for where are those dollars. And I'm sure at some point in time some of these funds have been used to help Medicaid, to prop up something if the governor has needed some money and he's been able to go to the Attorney General and ask for those funds to help.
But that's not the process that we all seem to go through of appropriating money so that we know where it is and what's happening to it. And as I say, it isn't just today. This has been going on for a very long time. So it's not a brand-new issue, and it wouldn't make any difference, you know, what party the Attorney General is, you know, right's right and wrong's wrong. That wouldn't make any difference. Thank you. Thank you, Mr. Chair.
Representative Jim Nickels
Unverified
47:33
Representative Nichols. Thank you, Mr. Chairman. Mr. Eri, you said something a while ago about
the federal courts and their power over the state. Will you describe for the committee what the 11th Amendment is about for the United States Constitution? Mr. Nichols, you've caught me completely off
Speaker 67
47:59
guard. If you would remind me about the text of the 11th Amendment, please.
Representative Jim Nickels
Unverified
48:05
The judicial power of the United States shall not be construed to extend to any suit in law or equity commenced or prosecuted against one of the United States by citizens of another state or by citizens who are subject to any foreign state. I think the 11th Amendment has been used to keep a lot of lawsuits being filed against the state. I was just concerned about your broad statement about the federal courts having the power over the states.
The other issue that I don't quite understand, and you said that cash funds don't have to be appropriated, but I thought there may be some AG's opinions on this. If not, maybe we can ask the AG's opinion on this, that once the state receives funds from whichever source, that they are subject to our appropriation laws.
And if that's the case, why do we even
Speaker 154
49:10
need this particular bill? Mr. Nichols, on your 11th Amendment point, you're right.
Speaker 76
49:17
The state should not, generally speaking, be subject to suit for money judgment in
Speaker 66
49:22
federal courts. That's not to say, of course, that the state can't, state officials can't be sued in the way of injunctive relief or declaratory relief, that sort of thing. And in terms of your question about cash funds, I hope my point was that the Constitution says that funds coming out of the Treasury have to be – are subject to appropriation, but not all cash funds come into the Treasury.
That does not mean that you can't appropriate cash funds. It's just that the Constitution does not compel that unless they come into the Treasury. Now, why these particular cash funds, I've not done the research and don't know the answer to why they are not currently appropriated. I don't know
Speaker 67
50:08
the answer to that, but I guess this would be my example of perhaps some funds
Representative Clark Hall
Unverified
50:16
that are not being appropriated. Are you through
Representative Wilkins? Mr. Erie, I'm – thank you, Mr. Chair.
Mr. Ayer, I'm confused a little bit about constitutional independent agencies, the Game Fish, the Highway Department, the Lottery Commission, which we recently, how would this affect them entities? If I could, Mr. Wilkins, let me
Speaker 110
50:46
look at the text of the bill real quick.
Speaker 66
50:57
I don't have a good answer for that. I've not thought about that question and was not asked to think about that question. You know, there are some things, even though those are independent agencies, for example, you still get to appropriate the salaries for people that work over there. Whether this would fit into that category or whether this would be separate, I don't know. Well, I had a follow-up,
Speaker 157
51:26
but I forgot it, so I don't get amounted to anything.
Representative Linda S. Tyler
Unverified
51:29
Thank you, sir. Representative Tyler, do you have any follow-up? I do. I remembered mine, Representative Wilkins. Hopefully, you'll remember
yours, too. We are focusing most of our questions and attention on the Attorney General's office, which is number three on this list. I guess my question is, do we have examples of other cash funds in other agencies that are handled differently than through the appropriation process that are listed here?
Representative Jane English
Unverified
52:07
Well, basically, we're talking about class action suits. So unless an agency goes into a class action suit, then I think it's moot. Then I ask why you included all of these other agencies. Just in case. so that if there was a time that the Department of Environmental Quality or any of these agencies would be involved in a class action suit
or awarded a huge amount of money from a suit, that that money would then be appropriated. Well, let's
Representative Linda S. Tyler
Unverified
52:46
use that example. Let's say there might be a class
action suit with the Department of Environmental Quality and the settlement. And maybe it's multiple states that do that. and let's say the settlement agreement suggests that that money be
spent in a certain way, how would we respond to that? I mean, I can envision a lawsuit just like that that might happen.
How would we handle that if once that class action suit was settled in favor of the states? It
Representative Jane English
Unverified
53:20
would be appropriated by the legislature. MS. Even though the
Representative Linda S. Tyler
Unverified
53:25
settlement agreement might specify that it needs to go specifically into cleanup activities. MS. That's quite possible that it
Representative Jane English
Unverified
53:33
could still go into cleanup and it would still be appropriated. Those funds would be appropriated through our appropriate, just like we do all kinds
of other things. They have right now, we appropriate money for them to the Department of Environmental Quality to do cleanup in all different kinds of areas as part of their program. I don't think it's probably going to happen too many times that the Department of Environmental Quality would initiate and be involved in a class action suit, but that money would be appropriated by the state legislature, and it could be appropriated specifically
Speaker 22
54:15
for cleanup. And it could also be changed to where it's sent over to the Department of Health for some other purpose, right, through our appropriation process? Good thing. Okay. Thank you. We have
Representative Clark Hall
Unverified
54:34
to the English question. We have Representative Lee has
presented some documents that she'd like to present to the committee. Do you have any objections? Nope.
Well, we're going to, she has some information she'd like to share with you to get your, see if you want to send it out to the committee before we move on. So we're just,
Representative Ann V. Clemmer
Unverified
55:11
if that's okay with you. what was
Speaker 161
55:14
your decision representing yes that's fine
Representative Clark Hall
Unverified
55:30
Representative Lee, is that okay with you, if the staff would hand that out? We have one more question from Representative Hobbs, I believe. Thank you, Mr. . You did recognize me, right? Yes.
Representative Debra M. Hobbs
Unverified
55:50
Okay, I want to make sure I heard that correctly. Thank you. Yes, ma'am. Thank you, Mr.
Chair. All right. And I'm sorry I wasn't in on your introductory. to step out to make a phone call, but currently, say, the commissioner of state lands, I know
pages and pages of delinquent lands, or delinquent taxes on properties were filed in the paper. When that money is collected, where does the money go? Is it his own fund, or does it go to general revenue? I don't
Representative Jane English
Unverified
56:21
know. I think it goes right back into the office revenue. So, Mr. Airy, do you happen? No, ma'am, not
Representative Debra M. Hobbs
Unverified
56:32
sorry. Okay. Okay, well, I mean, I assumed it would be, but I guess what I'm wondering is if someone
that's employed, so to speak, to represent taxpayers and, you know, carry out duties, then it seems to me like if they're fulfilling a job on behalf of taxpayers, that should be the taxpayers' money and go into the general revenue to be appropriated for the benefit of the taxpayers. Is that what
Representative Jane English
Unverified
57:04
you believe also? That's right. If you're using resources and you're supposedly representing the citizens of the state of Arkansas,
whatever funds come back should go to the people of the state of Arkansas. and we do have an
exemption on unclaimed property. That money just goes right back in to buy that property.
Representative Clark Hall
Unverified
57:27
Okay, thank you. Thank you, Mr. Chair. Thank you, Committee. Thank you, Representative English. We
have a couple of people already signed up to speak against this bill.
Mr. Brad Phipps, is that if you take a seat? State your name and who you're with,
Speaker 170
57:56
sir. Thank you, Mr. Chairman. I'm Brad Phelps. I'm the Chief Deputy at the Attorney General's Office. In that role, I, if it's okay with the committee, I'd like to proceed. Yes, sir. In that role, I supervise all of our attorneys and help the Attorney General manage all of
the state's litigation. I'm here to testify against HB 1046. I prepared some prefatory remarks to make. I assumed I would get some questions, but before I get into those remarks, there are a couple of things that were represented to the committee that I feel like I need to set the record straight on. First, we have complete transparency in how we spend every dime in our office. We are audited every single year by legislative audit.
In fact, before this session began, we were asked about all of our cash funds and asked to turn that over, which we did. We turned that over to Wendy Cartwright with the Bureau of Legislative Research every year, every fund, every dollar. And so those things have been done. And second, or excuse me, third, going to Mr. Airy's point, I do take some exception with him characterizing three of the state's cases when Mr. Airy was, A, not the attorney handling the case, B, wasn't in the room when the case was being handled, and C, wasn't in front of the judge when the case was being presented.
So he has no idea about what was negotiated on behalf of any case. If he wants to generalize about how cases are normally handled or how cases in his own limited experience, how cases are decided, then that's limited to his own experience. It's certainly not indicative of how things are done at the Attorney General's office. Now, moving to HB 1046, we believe HB 1046 is a bad bill for four principal reasons. First, 1046 is an improper intrusion into the judicial branch, and with legislative
Agenda
Call to Order
HB1046
Documents
No documents posted.
Speakers
Representative Clark Hall
Unverified
Representative Greg Leding
Unverified
Speaker 5
Eddie Parsley
Unverified
Speaker 9
Representative Linda S. Tyler
Unverified
Speaker 21
Lisa Mabry-Williams
Unverified
Speaker 30
Representative Butch Wilkins Chair
Unverified
Speaker 36
Representative Mary L. Slinkard Chair
Unverified
Representative Jane English
Unverified
Speaker 58
Speaker 59
Speaker 66
Speaker 67
Representative Eddie L. Cheatham
Unverified
Speaker 75
Speaker 79
Speaker 85
Representative Donna Hutchinson
Unverified
Speaker 76
Speaker 99
Speaker 101
Representative Tracy Steele
Unverified
Representative Nate Steel
Unverified
Representative Tiffany Rogers
Unverified
Speaker 55
Representative Debra M. Hobbs
Unverified
Representative Ann V. Clemmer
Unverified
Representative Jim Nickels
Unverified
Speaker 154
Speaker 110
Speaker 157
Speaker 22
Speaker 161
Speaker 170