Brief ⁽¹⁾

HB 3006, as amended by the House Committee, creates the Private Attorney Retention Sunshine Act. With a limited exception, it would require all state agencies to bid contracts for legal services competitively when the contract is reasonably expected by the state agency to result in legal fees of $7,500 or more.

General Provisions. Any state agency wishing to enter into a contract for legal services covered by the Act would be prohibited from doing so until an open and competitive bidding process is undertaken. The bill requires the state agency, unless otherwise required by law, to:

• Publish in the Kansas Register notice of competitive bidding for the contract at least two weeks prior to the deadline to receive bids;



• Select at least two qualified law firms based upon the law firms' experience with similar litigation, general expertise, size, if firm size is a relevant factor with respect to the proposed legal services, and other factors as determined by the Secretary of Administration through rules and regulations; and



• Select, from the qualified law firms, the firm which makes the lowest hourly rate bid or total cost to provide the services.

Contracts in Excess of $1.0 Million. The bill also provides that no state agency shall enter into a contract for legal services exceeding $1.0 million without the opportunity for at least one legislative hearing on the terms of the contract. To meet this requirement, a state agency would be required to file a copy of the proposed contract with the Chief Clerk of the House of Representatives and the Secretary of the Senate who would then refer the contract to the chairperson and vice chairperson of the Legislative Budget Committee.

Within 30 days of the referral, the Legislative Budget Committee may hold a public hearing on the proposed contract and issue a report, including any proposed changes to the contract voted upon by the Committee, to the referring state agency. The state agency would review the report, adopt a final contract as deemed appropriate in view of the report, and file the final contract with the Chief Clerk of the House and the Secretary of the Senate. If the final contract does not contain changes proposed by the Legislative Budget Committee, the agency must also file a letter explaining why the proposed changes were not made. The agency must then wait 45 days to enter into the final contract.

If the Legislative Budget Committee makes no proposed changes to the contract within 60 days of the initial filing of the proposed contract, the state agency would be authorized to enter into the contract.

Contingent Fee Contracts. The bill provides that at the conclusion of any legal proceeding for which a state agency retained outside counsel on a contingent fee basis, the state shall receive from counsel a statement containing:

• The hours worked on the case;



• Expenses incurred;



• The aggregate fee amount; and



• A breakdown as to the hourly rate, based on hours worked divided into the fee recovered, less expenses.

Under the provisions of the Act, no contract could incur expenses in excess of $1,000 per hour, and in cases where the disclosure provided by counsel indicated an hourly rate in excess of that amount, the fee amount would be reduced to $1,000 per hour.

Cases Where the State is a Defendant. As amended, the bill provides that in cases where the state is a defendant, the Court may continue the action at any stage of the proceedings in order to allow the state agency to put the contract out for bid.

Background

Proponents of the bill included Representative Tony Powell and House Minority Leader Jim Garner. Two conferees representing the American Legislative Exchange Council also appeared in support of the bill. Opponents of the bill included a representative of the Kansas Bar Association, and the Chief Counsel of the Kansas Department of Transportation.

The House Committee amended the bill as noted below:

• To place the $7,500 threshold on cases which must be bid competitively;



• To require publication of the notice of competitive bidding in the Kansas Register at least two weeks prior to the deadline for receipt of the bids;



• To provide for referral of contracts in excess of $1.0 million to the Legislative Budget Committee (the bill as introduced required referral of the contracts to an "appropriate committee" during the legislative session, and to the Legislative Budget Committee during the interim); and



• To provide for the cases where the state is a defendant.

The Division of the Budget fiscal note on the bill indicates that requiring the Division of Purchases of the Department of Administration to oversee the competitive bid process would require additional expenditures of $134,000 from the State General Fund for that agency. The fiscal note also indicates that there could be increased legislative expenses related to holding a public hearing, but notes that because a contract of that magnitude would not arise very often, any expense could presumably be covered within the Legislature's available resources.

1. *Supplemental notes are prepared by the Legislative Research Department and do not express legislative intent. The supplemental note and fiscal note for this bill may be accessed on the Internet at http://www.ink.org/public/legislative/bill_search.html