Text: HSB00561                          Text: HSB00563
Text: HSB00500 - HSB00599               Text: HSB Index
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House Study Bill 562

Bill Text

PAG LIN
  1  1    Section 1.  Section 13.7, Code 1999, is amended to read as
  1  2 follows:
  1  3    13.7  SPECIAL COUNSEL.
  1  4    1.  Compensation shall not be allowed to any person for
  1  5 services as an attorney or counselor to an executive
  1  6 department of the state government, or the head thereof, or to
  1  7 a state board or commission.  However, the executive council
  1  8 may employ legal assistance, at a reasonable compensation, in
  1  9 a pending action or proceeding to protect the interests of the
  1 10 state, but only upon a sufficient showing, in writing, made by
  1 11 the attorney general, that the department of justice cannot
  1 12 for reasons stated by the attorney general perform the
  1 13 service, which reasons and action of the council shall be
  1 14 entered upon its records.  When the attorney general
  1 15 determines that the department of justice cannot perform legal
  1 16 service in an action or proceeding, the executive council
  1 17 shall request the department involved in the action or
  1 18 proceeding to recommend legal counsel to represent the
  1 19 department.  If the attorney general concurs with the
  1 20 department that the person recommended is qualified and
  1 21 suitable to represent the department, the person recommended
  1 22 shall be employed.  If the attorney general does not concur in
  1 23 the recommendation, the department shall submit a new
  1 24 recommendation.  This section subsection does not affect the
  1 25 general counsel for the utilities board of the department of
  1 26 commerce, or the legal counsel of the department of workforce
  1 27 development.
  1 28    2.  The attorney general shall also comply with the
  1 29 provisions of chapter 23B in accordance with retention of
  1 30 counsel under this section, as appropriate.
  1 31    Sec. 2.  NEW SECTION.  23B.1  DEFINITIONS.
  1 32    For the purposes of this chapter:
  1 33    1.  "Contract for legal services in excess of one million
  1 34 dollars" means an agreement under which the fee paid to one or
  1 35 more attorneys, law firms, or other entities legally
  2  1 authorized to practice law in the relevant jurisdiction, for
  2  2 services to be rendered in connection with a single civil or
  2  3 criminal case, civil transaction or other legal matter, or
  2  4 series of connected cases, transactions, or other legal
  2  5 matters, exceeds or can be reasonably expected to exceed one
  2  6 million dollars.  This definition applies whether the
  2  7 agreement provides for the fee to be calculated in the form of
  2  8 a flat, hourly, or contingent fee, and the fee includes
  2  9 expenses associated with the handling of the legal matter.
  2 10    2.  "Open and competitive bidding process" means the
  2 11 process which includes advertisement for, solicitation of, and
  2 12 the procurement of bids; the manner and condition in which
  2 13 bids are received; and the procedure by which bids are opened,
  2 14 accessed, accepted, rejected, or awarded.
  2 15    3.  "State" includes any agency, executive board,
  2 16 commission, bureau, division, office, department, or
  2 17 authorized agent of the state of Iowa.
  2 18    Sec. 3.  NEW SECTION.  23B.2  COMPETITIVE BIDDING –
  2 19 PREFERENCES.
  2 20    1.  The state shall not seek to retain any attorney, law
  2 21 firm, or other entity legally authorized to practice law in
  2 22 the relevant jurisdiction, to perform legal services on behalf
  2 23 of this state until an open and competitive bidding process
  2 24 has been undertaken pursuant to the provisions of this
  2 25 chapter.
  2 26    2.  The attorney general shall solicit bids for the
  2 27 proposed contract by publishing an advertisement in a print
  2 28 format.  The advertisement shall appear in at least one
  2 29 newspaper with a circulation relevant to the jurisdiction in
  2 30 which the services are to be performed, and at least one
  2 31 publication circulated primarily to attorneys licensed to
  2 32 practice within the state of Iowa.  The first advertisement
  2 33 for bids shall be not less than fifteen days prior to the date
  2 34 set for receiving bids.  The attorney general may publish an
  2 35 advertisement in an electronic format or via direct facsimile
  3  1 or mail to qualified individuals or entities as an additional
  3  2 method of soliciting bids under this subsection.
  3  3    3.  The state shall give preference to purchasing Iowa
  3  4 services from Iowa-based attorneys, law firms, and other
  3  5 entities legally authorized to practice law in the relevant
  3  6 jurisdiction, if the bids submitted are comparable in price
  3  7 and quality to those submitted by other bidders, and meet the
  3  8 required specifications.
  3  9    4.  The bidding process required by this section may
  3 10 include a transaction accomplished in an electronic format.
  3 11    5.  Contracts shall be awarded on the basis of bidder
  3 12 competence, qualifications, and reasonable price, subject to
  3 13 the legislative oversight provisions of this chapter.
  3 14    6.  The attorney general may refuse all bids on any
  3 15 contract and institute a new bidding procedure.
  3 16    7.  The attorney general shall adopt rules according to
  3 17 chapter 17A related to procedures for the open and competitive
  3 18 bidding process in this chapter, including the amount of
  3 19 security, if any, to accompany a bid or as a condition
  3 20 precedent to the awarding of any contract and the
  3 21 circumstances under which a security will be returned to the
  3 22 bidder or forfeited to the state.
  3 23    Sec. 4.  NEW SECTION.  23B.3  LEGISLATIVE OVERSIGHT –
  3 24 PUBLIC HEARING.
  3 25    1.  The state shall not enter into a contract for legal
  3 26 services exceeding one million dollars without the opportunity
  3 27 for at least one public hearing, scheduled by the general
  3 28 assembly in accordance with this section, on the terms of the
  3 29 contract for legal services.
  3 30    2.  a.  The attorney general shall file any proposed
  3 31 contract for legal services in excess of one million dollars
  3 32 with the secretary of the senate and the chief clerk of the
  3 33 house of representatives, who, with the approval of the
  3 34 president of the senate and the speaker of the house of
  3 35 representatives, shall transmit such contract to the
  4  1 appropriate committees.
  4  2    b.  If the general assembly is not in session and the
  4  3 attorney general wishes to execute a contract for legal
  4  4 services in excess of one million dollars, the governor, with
  4  5 the unanimous consent of the president of the senate and
  4  6 speaker of the house of representatives may, establish a five-
  4  7 member interim committee consisting of five state legislators,
  4  8 one each to be appointed by the governor, the president of the
  4  9 senate, the speaker of the house of representatives, and the
  4 10 minority leader in each house of the general assembly, to
  4 11 execute the oversight duties as set forth in this section.
  4 12 The same deadlines and reporting responsibilities shall apply
  4 13 to the attorney general and this interim committee that apply
  4 14 to a standing committee of the general assembly executing its
  4 15 powers and obligations under this section.
  4 16    3.  a.  Within thirty days after transmittal, the
  4 17 legislative committee may hold a public hearing on the
  4 18 proposed contract and shall issue a report to the attorney
  4 19 general.  The report shall include any proposed changes to the
  4 20 proposed contract recommended by vote of the committee.
  4 21    b.  If the committee does not recommend any changes to the
  4 22 proposed contract within sixty days of the initial filing of
  4 23 the proposed contract with the secretary of the senate and the
  4 24 chief clerk of the house of representatives, the attorney
  4 25 general may enter into the contract.
  4 26    4.  The attorney general shall review the report of the
  4 27 committee and draft a revised proposed contract according to
  4 28 any recommended changes contained in the report and shall file
  4 29 the proposed contract with the secretary of the senate and the
  4 30 chief clerk of the house of representatives.
  4 31    5.  a.  If the proposed contract contains all changes
  4 32 recommended by the committee, the attorney general shall file
  4 33 the proposed contract with the secretary of the senate and the
  4 34 chief clerk of the house of representatives, accompanied by a
  4 35 letter stating that the recommended changes have been
  5  1 accepted.  The secretary of the senate and the chief clerk of
  5  2 the house of representatives shall transmit the letter and
  5  3 proposed contract to the appropriate committees.
  5  4    b.  The attorney general may enter into the contract no
  5  5 earlier than thirty days following submission of the contract
  5  6 and letter to the general assembly, unless the committee
  5  7 determines during the thirty-day period that the proposed
  5  8 contract does not substantially comply with the recommended
  5  9 changes of the committee.  In the event the committee makes
  5 10 such a determination, the procedures in subsection 7 shall
  5 11 apply.
  5 12    6.  If the proposed contract does not contain the changes
  5 13 recommended by the committee, the attorney general shall send
  5 14 a letter to the secretary of the senate and the chief clerk of
  5 15 the house of representatives accompanying the proposed
  5 16 contract stating the reasons why such proposed changes were
  5 17 not adopted.
  5 18    7.  a.  The committee shall have forty-five days to take
  5 19 action on the proposed contract.
  5 20    b.  If the committee and the attorney general cannot reach
  5 21 agreement on the terms of the contract during the forty-five-
  5 22 day period described in this subsection, the committee may
  5 23 renew the forty-five-day period by a majority vote of the
  5 24 committee.  There is no limit on the number of forty-five-day
  5 25 period renewals that may be imposed by the committee.
  5 26    c.  The attorney general shall not enter into a final
  5 27 contract during any forty-five-day period allowed under
  5 28 paragraph "a" or "b", without a written release signed by a
  5 29 majority of the committee waiving the imposition of the last
  5 30 forty-five-day period.
  5 31    Sec. 5.  NEW SECTION.  23B.4  LIMITATION ON CONTINGENT
  5 32 FEES.
  5 33    1.  At the conclusion of any legal proceeding for which the
  5 34 contract provides for recovery of a contingent fee or fees,
  5 35 the state shall receive from counsel a statement of the hours
  6  1 worked on the case, expenses incurred, the aggregate fee
  6  2 amount, and a breakdown as to the hourly rate, based on hours
  6  3 worked divided into the contingent fee to be recovered, less
  6  4 expenses.
  6  5    2.  In cases where the disclosure submitted in accordance
  6  6 with subsection 1 indicates an hourly rate in excess of thirty
  6  7 percent of the total amount recovered by verdict or
  6  8 settlement, or one thousand dollars per hour worked, the
  6  9 following shall apply:
  6 10    a.  The state shall not pay any contingent fee pursuant to
  6 11 any contract executed in accordance with this chapter that
  6 12 would result in a payment in excess of thirty percent of the
  6 13 total amount recovered by verdict or settlement, or of one
  6 14 thousand dollars per hour worked, whichever amount is less.
  6 15    b.  The fee amount for such contract shall be reduced to an
  6 16 amount equivalent to thirty percent of the total amount
  6 17 recovered by verdict or settlement, or one thousand dollars
  6 18 per hour worked, whichever amount is less.
  6 19    3.  Disputes regarding appropriate fees and expenses shall
  6 20 be resolved through mediation.
  6 21    4.  All contracts executed pursuant to this chapter shall
  6 22 expressly contain the limitation imposed by this section as
  6 23 part of the terms of the contract, and shall also otherwise
  6 24 contain fee provisions and disclosures in accordance with the
  6 25 Iowa code of professional responsibility for lawyers,
  6 26 including payment of expenses by the client.
  6 27    Sec. 6.  NEW SECTION.  23B.5  OTHER EXISTING LAW.
  6 28    The attorney general shall also comply with the provisions
  6 29 of section 13.7 in the retention of legal services.  However,
  6 30 the provisions of this chapter shall prevail, to the extent
  6 31 that there are any conflicts between the requirements of this
  6 32 chapter and other law.
  6 33    Sec. 7.  NEW SECTION.  23B.6  NO EXPANSION OF AUTHORITY TO
  6 34 CONTRACT.
  6 35    This chapter shall not be construed to expand the authority
  7  1 of the state to enter into contracts where no other authority
  7  2 exists.  
  7  3                           EXPLANATION
  7  4    This bill creates new Code chapter 23B, to address the
  7  5 procedure for retention of private counsel by the state, which
  7  6 according to the definitional section of the bill includes any
  7  7 agency, executive board, commission, bureau, division, office,
  7  8 department, or authorized agent of the state.
  7  9    The bill establishes in new Code section 23B.2 a
  7 10 competitive bidding process for the retention of private
  7 11 counsel, supervised by the attorney general, and requiring
  7 12 advertisement and establishing a standard for the award of
  7 13 contracts.  The attorney general is authorized to adopt rules
  7 14 related to the procedures for competitive bidding.
  7 15    The bill establishes in new Code section 23B.3 legislative
  7 16 oversight of the contract award process when the contract for
  7 17 legal services exceeds $1 million.  Such contracts must be
  7 18 filed by the attorney general with the general assembly.  The
  7 19 procedure authorizes transmittal of the filed contract to a
  7 20 legislative committee for further action, including the option
  7 21 for at least one public hearing on the terms of the contract
  7 22 within 30 days.
  7 23    If the committee recommends no changes, the attorney
  7 24 general may enter into the contract after 60 days after the
  7 25 initial filing of the proposed contract.  If the committee
  7 26 recommends changes, the attorney general must revise the
  7 27 proposed contract and resubmit it to the general assembly.  If
  7 28 the revised proposed contract substantially contains all
  7 29 recommended changes, the attorney general can enter into the
  7 30 contract after 30 days, unless there is determination by the
  7 31 committee that the contract does not substantially contain all
  7 32 recommended changes.  In that event, or in the event the
  7 33 attorney general files a revised proposed contract along with
  7 34 a letter explaining why recommended changes have not been
  7 35 adopted, the committee shall have 45 days to take action on
  8  1 the proposed contract.  If the committee and the attorney
  8  2 general cannot agree on the terms of the contract during the
  8  3 45-day period, the committee may extend the consideration for
  8  4 an additional 45 days.  There is no limit on the number of
  8  5 extensions that may be approved by the committee.  The
  8  6 attorney general is prohibited from entering into a final
  8  7 contract during any such 45-day period, unless a waiver is
  8  8 signed by a majority of the committee.
  8  9    New Code section 23B.4 contains a special limitation on
  8 10 contingent fee agreements.  Counsel which are party to such
  8 11 agreements are required to submit a disclosure to the state at
  8 12 the conclusion of such proceedings which analyzes the hourly
  8 13 rate for the work performed.  Disclosures which reveal an
  8 14 hourly rate in excess of the lesser of 30 percent of the
  8 15 amount of the verdict or settlement, or $1,000 per hour, shall
  8 16 be reduced to the lesser of 30 percent of the amount of the
  8 17 verdict or settlement, or $1,000 per hour, a limitation which
  8 18 shall be included in the terms of any contract based on a
  8 19 contingent fee.  Disputes regarding such fees are to be
  8 20 resolved by mediation.
  8 21    The bill also amends Code section 13.7, the current Code
  8 22 section pertaining to the retention of private counsel by the
  8 23 attorney general, to specify that the procedures of new Code
  8 24 chapter 23B apply.  
  8 25 LSB 5179YC 78
  8 26 jj/cf/24.1
     

Text: HSB00561                          Text: HSB00563
Text: HSB00500 - HSB00599               Text: HSB Index
Bills and Amendments: General Index     Bill History: General Index

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