S.F. 210 Section 1. Section 13.7, Code 2011, is amended to read as 1 follows: 2 13.7 Special counsel. 3 Compensation shall not be allowed to any person for services 4 as an attorney or counselor to an executive department of the 5 state government, or the head thereof, or to a state board 6 or commission. However, the executive council may employ 7 legal assistance , at a reasonable compensation, in a pending 8 action or proceeding to protect the interests of the state , 9 but only upon a sufficient showing, in writing, made by the 10 attorney general, that the department of justice cannot for 11 reasons stated by the attorney general perform the service, 12 which reasons and action of the council shall be entered 13 upon its records. When the attorney general determines that 14 the department of justice cannot perform legal service in an 15 action or proceeding, the executive council shall request the 16 department involved in the action or proceeding to recommend 17 legal counsel to represent the department. If the attorney 18 general concurs with the department that the person recommended 19 is qualified and suitable to represent the department, the 20 person recommended shall be employed. If the attorney general 21 does not concur in the recommendation, the department shall 22 submit a new recommendation pursuant to chapter 23B . This 23 section does not affect the general counsel for the utilities 24 board of the department of commerce, the legal counsel of the 25 department of workforce development, or the general counsel for 26 the property assessment appeal board. 27 Sec. 2. NEW SECTION . 23B.1 Citation. 28 This chapter may be known and cited as the “Transparency in 29 Private Attorney Contracts Act” . 30 Sec. 3. NEW SECTION . 23B.2 Definitions. 31 For the purposes of this chapter: 32 1. “Government attorney” means an attorney employed by the 33 state as a staff attorney in the attorney general’s office. 34 2. “Private attorney” means any private attorney or law 35 -1- LSB 2089SS (3) 84 rh/nh 1/ 6

S.F. 210 firm. 1 3. “State” means the state of Iowa and includes state 2 officers, departments, boards, commissions, divisions, bureaus, 3 councils, and units of organization, however designated, of the 4 executive branch of state government, and any of its agents. 5 Sec. 4. NEW SECTION . 23B.3 Contracts for legal services. 6 1. The state shall not enter into a contingency fee contract 7 with a private attorney unless the attorney general makes a 8 written determination prior to entering into such a contract 9 that contingency fee representation is both cost-effective 10 and in the public interest. Any written determination shall 11 include specific findings for each of the following factors: 12 a. Whether sufficient and appropriate legal and financial 13 resources exist within the attorney general’s office to handle 14 the matter. 15 b. The time and labor required, the novelty, complexity, and 16 difficulty of the questions involved, and the skill required to 17 perform the attorney services properly. 18 c. The geographic area where the attorney services are to 19 be provided. 20 d. The amount of experience desired for the particular 21 kind of attorney services to be provided and the nature of the 22 private attorney’s experience with similar issues or cases. 23 2. If the attorney general makes the determination 24 described in subsection 1, the attorney general shall issue a 25 request for proposals from private attorneys to represent the 26 department of justice on a contingency fee basis, unless the 27 attorney general determines that requesting proposals is not 28 feasible under the circumstances and sets forth the basis for 29 this determination in writing. 30 3. a. The state shall not enter into a contingency fee 31 contract that provides for a private attorney to receive 32 an aggregate contingency fee in excess of the sum of the 33 following: 34 (1) Twenty-five percent of any recovery up to and including 35 -2- LSB 2089SS (3) 84 rh/nh 2/ 6

S.F. 210 ten million dollars. 1 (2) Twenty percent of any portion of any recovery that 2 exceeds ten million dollars up to and including fifteen million 3 dollars. 4 (3) Fifteen percent of any portion of any recovery that 5 exceeds fifteen million dollars up to and including twenty 6 million dollars. 7 (4) Ten percent of any portion of any recovery that exceeds 8 twenty million dollars up to and including twenty-five million 9 dollars. 10 (5) Five percent of any portion of any recovery that exceeds 11 twenty-five million dollars. 12 b. The aggregate contingency fee of any recovery shall not 13 exceed fifty million dollars, exclusive of reasonable costs and 14 expenses, and regardless of the number of lawsuits filed or the 15 number of private attorneys retained to achieve the recovery. 16 4. The attorney general shall develop a standard addendum to 17 every contract for contingent fee attorney services that shall 18 be used in all cases, describing in detail what is expected of 19 both the contracted private attorney and the state, including, 20 without limitation, all of the following requirements: 21 a. A government attorney shall retain complete control over 22 the course and conduct of the case. 23 b. A government attorney with supervisory authority shall be 24 personally involved in overseeing the litigation. 25 c. A government attorney shall retain veto power over any 26 decisions made by the contracted private attorney. 27 d. A defendant that is the subject of such litigation may 28 contact the lead government attorney directly, without having 29 to confer with the contracted private attorney. 30 e. Decisions regarding settlement of the case shall be 31 reserved exclusively to the discretion of the government 32 attorney and the state. 33 5. Copies of any executed contingency fee contract as 34 well as the attorney general’s written determination to 35 -3- LSB 2089SS (3) 84 rh/nh 3/ 6

S.F. 210 enter into a contingency fee contract with a private attorney 1 shall be posted on the attorney general’s website for public 2 inspection within five business days after the date the 3 contract is executed and shall remain posted on the website for 4 the duration of the contingency fee contract, including any 5 extensions or amendments thereto. Any payment of contingency 6 fees shall be posted on the attorney general’s website within 7 fifteen days after the payment of such contingency fees to the 8 private attorney and shall remain posted on the website for at 9 least one year thereafter. 10 6. Any private attorney under contract to provide services 11 to the state on a contingency fee basis shall, from the 12 inception of the contract until at least four years after 13 the contract expires or is terminated, maintain detailed 14 current records, including documentation of all expenses, 15 disbursements, charges, credits, underlying receipts and 16 invoices, and other financial transactions that concern the 17 provision of such attorney services. The private attorney 18 shall make all such records available for inspection and 19 copying upon request in accordance with chapter 22. In 20 addition, the private attorney shall maintain detailed 21 contemporaneous time records for the attorneys and paralegals 22 working on the matter in increments of no greater than 23 one-tenth of an hour and shall promptly provide these records 24 to the attorney general, upon request. 25 7. The attorney general shall submit a report to the 26 secretary of the senate and the chief clerk of the house of 27 representatives describing the use of contingency fee contracts 28 with private attorneys in the preceding calendar year by 29 February 1 of each year. At a minimum, the report shall 30 include all of the following information: 31 a. Identify all new contingency fee contracts entered into 32 during the year and all previously executed contingency fee 33 contracts that remain current during any part of the year, and 34 for each contract describe: 35 -4- LSB 2089SS (3) 84 rh/nh 4/ 6

S.F. 210 (1) The name of the private attorney with whom the state has 1 contracted, including the name of the attorney’s law firm. 2 (2) The nature and status of the legal matter. 3 (3) The name of the parties to the legal matter. 4 (4) The amount of any recovery. 5 (5) The amount of any contingency fee paid. 6 b. Copies of any written determinations made under 7 subsection 1 or 2 during the year. 8 Sec. 5. NEW SECTION . 23B.4 No expansion of authority to 9 contract. 10 This chapter shall not be construed to expand the authority 11 of a state agency or state agent to enter into contracts where 12 no such authority previously existed. 13 Sec. 6. NEW SECTION . 23B.5 Chapter inapplicable. 14 This chapter shall not apply to legal services contracts 15 under chapter 13B. 16 EXPLANATION 17 This bill creates the transparency in private attorney 18 contracts Act in new Code chapter 23B to address the procedure 19 for retention of a private attorney by this state defined to 20 include state officers, departments, boards, commissions, 21 divisions, bureaus, councils, and units of organization, 22 however designated, of the executive branch of state 23 government, and any of its agents. 24 The bill specifies a procedure for the state’s retention of a 25 private attorney on a contingency fee basis. The bill requires 26 the attorney general to analyze certain factors and make a 27 written determination that the contingency fee representation 28 will be both cost-effective and in the public interest prior 29 to entering into a contract and prior to issuing a request 30 for proposals from private attorneys or making a written 31 determination that such a request is not feasible under the 32 circumstances. 33 All contingency fees in the bill are subject to tiered 34 limits and an aggregate cap of $50 million, exclusive of 35 -5- LSB 2089SS (3) 84 rh/nh 5/ 6

S.F. 210 reasonable costs and expenses (25 percent of any recovery up 1 to and including $10 million; plus 20 percent of the next 2 $5 million in recoveries; plus 15 percent of the next $5 3 million in recoveries; plus 10 percent of the next $5 million 4 in recoveries; plus 5 percent of any portion of the recovery 5 that exceeds $25 million). All contingency fee contracts 6 must include certain standard provisions to help assure 7 that government attorneys retain absolute control over the 8 litigation. The bill requires the contingency fee contract, 9 payments made under the contract, and the attorney general’s 10 written determination about the need for contingency fee 11 representation to be posted on the attorney general’s website. 12 Other records relating to the contract are subject to Code 13 chapter 22 (Iowa’s open records law). The contracted private 14 attorneys and paralegals are required to maintain detailed 15 contemporaneous time records for presentation to the attorney 16 general upon request. The attorney general is required to 17 submit an annual report to the secretary of the senate and the 18 chief clerk of the house of representatives that describes the 19 state’s retention of private attorneys on a contingency fee 20 basis in the preceding calendar year. 21 The bill does not expand the state’s authority to enter into 22 contracts where no such authority previously existed. 23 The bill provides that this new Code chapter does not apply 24 to legal services contracts under Code chapter 13B relating to 25 public defenders. 26 The bill amends Code section 13.7, the current Code section 27 relating to the retention of private counsel by executive 28 branch departments and by the attorney general, to specify that 29 the procedures in new Code chapter 23B apply. 30 -6- LSB 2089SS (3) 84 rh/nh 6/ 6